Philips to acquire The Spectranetics Corp.

The board of directors of Spectranetics has approved the transaction and recommends the offer to its shareholders. The transaction is expected to close in the third quarter of 2017. “Today’s exciting announcement follows a series of bolt-on acquisitions to strengthen our portfolio across the health continuum,” said Frans van Houten, CEO of Royal Philips. “Building on the successful integration of the Volcano acquisition in early 2015, we are now accelerating our strategic expansion into therapy devices with the agreement to acquire Spectranetics. This transaction is expected to be revenue growth and profit accretive by 2018, given the projected revenue and productivity synergies. Spectranetics’ highly competitive product range, integrated with our portfolio of interventional imaging systems, devices, software and services will enable clinicians to decide, guide, treat and confirm the appropriate cardiac and peripheral vascular treatment to deliver enhanced care for patients with better outcomes, as well as significantly boost recurring revenue streams for Philips.” “We are pleased to announce this agreement with Philips, which will deliver significant value to our shareholders,” said Scott Drake, President and CEO of Spectranetics. “Combining Philips’ innovations in image-guided therapy with Spectranetics’ portfolio and expertise in the therapeutic device space will create exciting opportunities and allow us to accelerate growth. As part of Philips, we will have the scale and resources to expand Spectranetics’ portfolio of highly differentiated products, our robust innovation pipeline, and our clinical data compendium. This transaction is a testament to the hard work and dedication of Spectranetics’ talented teammates. We have tremendous respect for Philips, as our two companies have a shared view on the importance of culture, values, and innovation, as well as a shared focus on improving patients’ lives around the world. We look forward to a smooth transition.” Upon completion of the transaction, Spectranetics and its more than 900 employees will become part of the Image-Guided Therapy Business Group within Philips. Spectranetics’ standalone revenue growth is expected to be double-digit and adjusted EBITDA to be positive by 2018. As a result, the combined Spectranetics and Philips Image Guided Therapy Devices business (Philips Volcano), within the Image-Guided Therapy Business Group, is expected to grow to approximately EUR 1 billion by 2020. For the overall Image-Guided Therapy Business Group, Philips targets a high single-digit comparable sales growth and high-teens adjusted EBITDA margin for the medium-term. In 2016, this business group reported sales of approximately EUR 1.9 billion of which approximately 20 percent was attributable to device sales. The transaction is expected to be accretive to Philips’ revenue growth, adjusted EBITDA margins and adjusted EPS by 2018.