A Medical Device Daily
Royal Philips Electronics (Amsterdam, the Netherlands) reported that it has agreed to acquire clinical IT and service provider Visicu (Baltimore, Maryland) for about $430 million, with Visicu shareholders paid $12 a share in cash, a 35% premium over the company' closing price of $8.86 on Monday.
Philips' offer represents an enterprise value of about $300 million (about 1200 million), when accounting for about $130 million in cash on Visicu's balance sheet as of Sept. 30.
By integrating Visicu's remote patient monitoring and clinical decision support technology with Philips' patient monitors, the companies said they expect to accelerate growth by offering products that provide more effective clinical decision support to hospital staff, allowing them to monitor far greater numbers of critically ill patients.
Visicu's board has approved the transaction and has recommended that its shareholders vote their shares in its favor. Deal closing is subject to the terms and conditions of the merger agreement, the approval of Visicu's shareholders, and customary regulatory clearance. The transaction is expected to close in 1Q08.
Visicu develops clinical IT systems that enable critical care medical staff to actively monitor patients in hospital intensive care units (ICUs) from remote locations. The company's clinical IT system, called the eICU Program, provides real time, 24/7 patient monitoring in ICUs, and can be likened to an air-traffic controller's station by centrally networking critical care physicians and nurses to ICU beds using voice and video. Equipped with artificial intelligence algorithms, the system also offers advance clinical support. The company said the eICU Program has been shown to "significantly reduce" patient mortality, length of stay, and medical complications while lowering ICU costs.
"Today's deal builds on Philips' announcement two weeks ago that we're acquiring another clinical IT company, Emergin [Boca Raton, Florida]," said Steve Rusckowski, CEO of Philips Healthcare in a statement. "Philips is a market leader in patient monitoring systems in the hospital, so we know the challenges our customers face - rising patient numbers, staff shortages and concerns about patient safety. By investing in clinical IT solutions like those offered by Visicu and Emergin, we believe we can offer customers more attractive patient monitoring solutions that improve hospital productivity as well as patient outcomes. So making these investments we believe will drive further growth in our patient monitoring business."
The company reported its plans to acquire Emergin earlier this month.
Visicu's eICU Program is designed to track ICU patients at various hospitals, and provides continuous monitoring of patient vitals signs, medications, labs and early-warning alarms - known as "Smart Alerts" - which are triggered by deviations in a patient's vital signs, based on their admitting or current diagnosis. Smart Alerts use embedded algorithms and protocols to send warning signals to physicians and nurses to provide early medical intervention and optimal care.
The eICU Program also supplements hospitals' critical care staff by allowing them to increase the number of ICU patients monitored by a factor of 15. The clinical and financial benefits of the eICU Program have resulted in several affiliated hospitals electing to expand their eICU program to serve smaller regional and rural hospitals outside of their network.
Philips said it intends to capitalize on its extensive sales channel network to accelerate Visicu's adoption by ICUs at U.S. hospitals, while internationalizing Visicu's activities and migrating its technologies into other departments within the hospital.
Founded in 1998, Visicu has a staff of about 100, which includes clinicians, software developers, sales and client services personnel. The company had sales over a 12-month period, ending in 3Q07, of about $36 million. Over the last three years, the company said it has seen its sales almost double, and the company reported in its 3Q results that it had about $60 million in revenue backlog.
Morgan Stanley & Co. advised Visicu on the transaction and legal representation was provided by DLA Piper US.
In other dealmaking news:
- Affymetrix (Santa Clara, California) reported that it has agreed to acquire USB (Cleveland), a privately held maker of molecular biology and biochemical reagent products, for $75 million in cash. Affymetrix said the acquisition will enable it to accelerate the development and commercialization of new genetic analysis solutions and increase the value of its current product portfolio. The transaction is expected to close in 1Q08, subject to customary closing conditions and regulatory approvals. "The integration of USB's biochemical reagents with Affymetrix' current and future products will greatly accelerate our ability to develop and commercialize more complete customer solutions," said Kevin King, president of Affymetrix. "USB is a recognized leader in the life sciences industry with strong brand equity and established manufacturing capabilities. This acquisition is a strategic fit for Affymetrix' growth strategy and we expect it to be modestly accretive to our 2008 earnings per share, before anticipated charges relating to the transaction." USB develops enzymes, reagents and kits for life science research and industrial applications. The company's offerings are grouped into three major product lines consisting of molecular biology enzymes and kits, biochemical reagents and products used in membrane protein research applications. Affymetrix technology is used by pharmaceutical, diagnostic and biotechnology companies, as well as academic, government and not-for-profit research institutes.
- IPC The Hospitalist Company (IPC; North Hollywood, California) reported acquiring Accomplished Diagnostic Medical Inpatient Team (ADMIT; San Antonio), a hospitalist group. ADMIT is comprised of 11 physicians operating as two practice groups; one group is located in North Central Baptist Hospital and the other in Northeast Baptist Hospital (both San Antonio). Both hospitals are acute care suburban facilities and part of the Baptist Health System (Birmingham, Alabama) owned by Vanguard Health Systems (Nashville, Tennessee). Between the two hospitals, ADMIT physicians currently treat about 150 patients per day. The purchase of the ADMIT Hospitalist Group marks the seventh acquisition that IPC has made in 2007. IPC is a provider of hospitalist medicine in the U.S. Founded in 1995, it owns or provides management services to hospitalist practices operating in more than 300 facilities across 16 states.