Natus Medical Inc.'s stock (NASDAQ; BABY) slipped 9.73 percent ($4.28) after the company said it expected a revenue shortfall for the third quarter, primarily due to a shipping hold, but also shared plans to buy GN Otometrics from GN Store Nord A/S in a $145 million cash deal.

Natus, of Pleasanton, Calif., said the acquisition of Otometrics, which makes hearing diagnostic and balance assessment equipment and has contributed about $110 million in annual revenue to Taastrup, Denmark-based GN, will expand its offering with "very little overlap." The deal is expected to close by the end of the year.

But the news was tempered by the company's updated third quarter revenue guidance of $89 million to $91 million, down from the company's previously-expected $97 million to $98 million revenue for the quarter. Natus said most of the shortfall is due to a voluntary hold on certain products produced in its Seattle facility, and the rest is due to lower demand in the international markets.

The ship hold is not related to any product safety issue, the company said, rather it is in place while Natus fixes deficiencies in its engineering and manufacturing quality processes to bring the facility up to regulatory standards. Natus said it expects to resume shipments of the affected products over the next two quarters.

In the meantime, CEO Jim Hawkins told conference call listeners Monday that the company will continue to take orders, but will not ship those products until the remediation process is complete.

"It's a short-term setback that we expect to [resolve] during our first quarter next year," Hawkins said.

On a lighter note, he said the addition of Otometrics should boost Natus' 2017 revenue to $500 million, which he said would be "a major milestone" for the company. The acquisition is expected to be accretive to 2017 earnings with a non-GAAP contributing operating margin goal for the year of 10 percent and a 2018 goal of 20 percent, he said.

While the anticipated shortfall in the company's third quarter revenue is disappointing, said Chris Lewis, of Roth Capital Partners, the Otometrics deal is a meaningful positive, based on the potential 2017 revenue impact and the expanded product offering.

Still, other analysts seemed more concerned with the downward trend in international sales, which may not be such a short-term setback. Brian Weinstein, of William Blair & Company, said during Natus' call that the third quarter will mark 12 straight quarters of year-over-year decline. He asked Hawkins what the company is doing to reverse that trend.

Hawkins questioned Weinstein's number, thought he didn't know off-hand what the correct number is regarding the consecutive quarters in which international sales have been down. To answer the analyst's question, however, he said the company is looking at its sales organization and wants to "really help drive in-country products in a harder way than we are doing now, with more focus." He also acknowledged that it is, overall, a "challenging time" in that regard. Acquisitions 'core' to BABY's growth

Both Hawkins and CFO Jonathan Kennedy said during the call that acquisitions have been and will continue to be a core part of Natus' growth strategy.

Integrating Otometrics will certainly keep Natus busy for a while, Hawkins said, but he hinted that the company is keeping tabs on "multiple opportunities" in complementary businesses that could turn into future deals.

"While we have been very active with small tuck-in acquisitions and organic development of our service initiatives, our last significant transaction was the acquisition of Nicolet Neurodiagnostic business from Carefusion back in 2012," Kennedy said. "As you may recall, at the time of acquisition, Nicolet was a well-respected leader in their market, but lacked operational focus and profitabilities part of a large organization."

Today, Nicolet and Natus' operational margin is more than 30 percent, Kennedy said, adding that the company expects Otometrics to be a similar success story, and has set operating margin profitability goals of 10 percent in 2017 and 20 percent in 2018.