Mindray acquires Datascope's patient monitoring business
14 March 2008
Chinese company Mindray Medical International Limited (NYSE: MR) is
to take over Datascope Corp's (Nasdaq: DSCP) patient monitoring
business for US$240 million in a move that will combine its
manufacturing facilities and markets in China with an established
presence in the US and Europe.
Datascope will receive $202 million in cash at the closing and will
retain approximately $38 million of receivables generated by the patient
Datascope says that it believes that its planned earnings for fiscal
2009 will be essentially unaffected by the sale of the patient
monitoring business, before reflecting any benefits from the receipt and
application of the net proceeds from the sale.
The acquisition will double Mindray's sales. Datascope's patient monitoring business achieved total revenues of
US$161.3 million in calendar year 2007, approximately the same revenues
generated from Mindray's home China market. The move will create the
third-largest player in the global patient-monitoring device industry.
Mindray says the takeover will combine its strong China-based engineering and production
platforms with Datascope's established brands, long standing reputation
for high-quality products and service, its large and established direct
sales and service team in the United States and Europe and both
companies' leading R&D capabilities.
"This transaction represents a
unique combination of strengths that will help transform Mindray from a
largely China-based company into a global leader, and substantially
further our strategy of building a leading on-the-ground presence in the
United States and Europe," said Mr. Xu Hang, Mindray's chairman and
co-chief executive officer.
"Datascope customers should also benefit
from the combined company's expanded product lineup and enhanced ability
to tailor product functionality for specific end-user requirements, and
Mindray's customers in the United States and Europe will enjoy the
support of an established direct sales and service network."
The company says it will maintain Datascope's existing branded product
lines and to continue manufacturing Datascope products in the United
States. David Gibson, Datascope's vice president and president, patient
monitoring division and technology services division, will serve as the
president of Mindray's Datascope patient monitoring business unit upon
completion of the transaction. The existing management team is expected
to continue post-closing without significant changes along with the rest
of the patient monitoring division staff.
Currently, the majority of Datascope's patient monitoring revenue is
generated from sales in North America, with the remainder from markets
largely in Europe.
Mr Li Xiting, Mindray's president and co-chief executive officer
commented, "This is an exceptional fit of complementary assets in the
patient monitoring industry. Datascope's strength in direct sales to
under-300 bed hospitals, its leading market share in key niche areas,
and direct sales and service team in the United States and Europe offer
immediate cross-selling opportunities for Mindray's high
performance-to-price medical imaging systems. Also, by leveraging
Mindray's China-based R&D, we are positioned to tailor existing
Datascope models for new markets and enhance product functionality. With
our common culture of performance and dedication to meeting customer
needs, I am very optimistic for the future of the combined business."
Mr Li noted that the combined company will enjoy leading market
share in specific sub-segments of the US patient monitoring market, such
as ambulatory surgery centres, the hospital anaesthesia market and the
vital signs monitoring market, as well as significant strength in
centralised monitoring systems.
The combined business will have approximately 4,100 employees and offer over 50 products
across Mindray's three product segments.