Philips to acquire Spectranetics

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Royal Philips and The Spectranetics Corporation have entered into a definitive merger agreement. Pursuant to the agreement, Philips will commence a tender offer to acquire all of the issued and outstanding shares of Spectranetics for US$38.50 per share, to be paid in cash upon completion.

This represents a 27% premium to Spectranetics closing price on 27 June, 2017. The implied enterprise value is approximately €1.9 billion, inclusive of Spectranetics’ cash and debt. 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.

Philips has a leadership position in the over €6 billion image-guided therapy market with a unique portfolio of interventional imaging systems and devices, planning and navigation software, and services, serving a large, global customer base and supported by a global network of leading clinical partners.

The acquisition of Spectranetics will further expand and strengthen Philips’ Image-Guided Therapy Business Group. Spectranetics is a leader in vascular intervention to treat coronary and peripheral artery disease, and in lead management for the minimally invasive removal of implanted pacemaker and implantable cardioverter defibrillator leads. Spectranetics is currently growing double digits and projects 2017 sales to be in the range of US$293–306 million.

“Today’s exciting announcement follows a series of bolt-on acquisitions to strengthen our portfolio across the health continuum,” said Frans van Houten, chief executive officer 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 chief executive officer 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.”


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