Royal Philips NV will close on its $635 million acquisition of Capsule Technologies Inc. in the first quarter of 2021, continuing the expansion of the Dutch company's remote monitoring capabilities. Capsule's Medical Device Information Platform integrates nearly all medical devices used in hospitals with electronic health records in a vendor-neutral system. The deal has already received approval from the U.S. Federal Trade Commission and the Department of Justice.
The acquisition continues Amsterdam-based Philips’ recent buying spree. After nearly a year’s hiatus, the company started small with the purchase of Reacts, a telehealth and augmented reality company in July 2020, followed by the $360 million acquisition of Intact Vascular Inc. in August, and one of last year’s mega-deals, the December $2.8 billion purchase of Biotelemetry Inc., the market leader in cardiac diagnostics and monitoring solutions.
Earlier in January 2021, the company also reported a multi-year partnership with Merck to use remote patient monitoring, cloud-based platform services and AI-enabled ultrasound diagnoses to provide greater personalization and better outcomes in fertility treatment.
“We have a clear strategy to be successful and transform care along the health continuum combining smart systems devices, informatics, data and services,” Philips CEO François Adrianus van Houten said in an analysts’ call following the Biotelemetry deal. He noted that the company would not exclude doing acquisitions in 2021, but said, “we’ll be very selective” and will look for deals with “great strategic and operational synergies.”
The Capsule transaction fits that bill. Philips already provides real-time patient monitoring and a wide range of therapeutic devices for use in both hospital and remote settings. It has steadily expanded its telehealth offerings and integrated informatics and interoperability solutions to facilitate clinical decision-making.
“Integrated patient care management solutions supported by essential real-time patient data and AI are core to our strategy to improve patient outcomes and care provider productivity by seamlessly connecting care,” said Roy Jakobs, chief business leader for Philips’ Connected Care division. “The acquisition of Capsule will further expand our patient care management offering. We look forward to integrating our strengths, adding a vendor-neutral medical device integration platform that further unlocks the power of medical device data to enhance patient monitoring and management, improve collaboration and streamline workflows in the ICU, as well as other care settings in the hospital and beyond its walls.”
Capsule’s Medical Device Information Platform will connect through Philips’ vendor-neutral cloud-based Healthsuite digital platform and “will greatly enrich and scale Philips’ patient care management solutions for all care settings in the hospital, as well as remote patient care,” Philips said.
Capsule’s platform pulls together information from the live stream of medical device data and then analyzes it to help clinicians interpret data and determine appropriate care. The platform provides connectivity to more than 940 medical devices, virtually all existing medical devices and clinical systems. The system also includes predictive analytics and clinical research to facilitate end-to-end data management and connectivity.
Capsule folds into Connected Care
Andover, Mass.-based Capsule was founded in 1997 and has research and development operations in the U.S. and France. Today Capsule serves more than 2,800 hospitals and health care organizations in 40 countries across the globe. In 2020, it posted sales of more than $100 million with strong double-digit growth, primarily from its software-as-a-service and licensing revenues.
The company has experienced significant changes in ownership over the last few years. Qualcomm Life bought the company in 2015 and the investment firm Francisco Partners acquired the company in February 2019.
“We are very excited to become part of Philips and step up on our goal of empowering clinicians with simplified workflows and timely, actionable insights,” said Hemant Goel, CEO of Capsule Technologies. “Together, we will be even better positioned to liberate, aggregate, analyze, and share clinical data from connected devices that will support clinicians making more informed decisions, and ultimately drive the transformation from reactive care to insight-driven, proactive care delivery.”
Philips and Capsule have partnered to offer joint solutions to health care organizations around the world for the last 10 years. The company’s 300 employees and leadership team will become part of Philips’ Connected Care segment.
Philips expects the acquisition to be accretive to sales growth and adjusted EBITA margin in 2021.