What You Should Know:
– Philips acquires BioTelemetry, a U.S. provider of remote cardiac diagnostics and monitoring for $72.00 per share for an implied enterprise value of $2.8 billion (approx. EUR 2.3 billion).
– With $439M in revenue in 2019, BioTelemetry annually monitors over 1 million cardiac patients remotely; its portfolio includes wearable heart monitors, AI-based data analytics, and services.
– BioTelemetry business is expected to deliver double-digit growth and improve its Adjusted EBITA margin to over 20% by 2025; the acquisition will be sales growth and adjusted EBITA margin accretive for Philips in 2021.
Philips, today announced it has entered in an agreement to acquire BioTelemetry, Inc., a U.S.-based provider of remote cardiac diagnostics and monitoring for $2.8B ($72 per share), to be paid in cash upon completion.
USD 72.00 per share, to be paid in cash upon completion. The board of directors of BioTelemetry has approved the transaction and recommends the offer to its shareholders. The transaction is expected to be completed in the first quarter of 2021.
BioTelemetry Background
Founded in 1995, BioTelemetry primarily focuses on the diagnosis and monitoring of heart rhythm disorders, representing 85% of its sales. BioTelemetry’s clinically validated offering includes wearable heart monitors (e.g. a mobile cardiac outpatient telemetry patch and extended Holter monitor) that detect and transmit abnormal heart rhythms wirelessly, AI-based data analytics, and services.
With over 30,000 unique referring physicians per month, BioTelemetry provides services for over one million patients per year. Additionally, BioTelemetry has a clinical research business that provides testing services for clinical trials. The total addressable market is USD 3+ billion, growing high-single-digits driven by an increasing prevalence of chronic diseases, and the adoption of remote monitoring and outcome-oriented models.
Acquisition Strengthens Philips’ Cardiac Care Portfolio
The acquisition of BioTelemetry is a strong fit with Philips’ cardiac care portfolio, and its strategy to transform the delivery of care along the health continuum with integrated solutions. The combination of Philips’ leading patient monitoring position in the hospital with BioTelemetry’s leading cardiac diagnostics and monitoring position outside the hospital, will result in a global leader in patient care management solutions for the hospital and the home for cardiac and other patients. Philips’ current portfolio includes real-time patient monitoring, therapeutic devices, telehealth, and informatics. Moreover, Philips has an advanced and secure cloud-based Philips HealthSuite digital platform optimized for the delivery of healthcare across care settings. Every year, Philips’ integrated solutions monitor around 300 million patients in hospitals, as well as around 10 million sleep and respiratory care patients in their own homes.
“The acquisition of BioTelemetry fits perfectly with our strategy to be a leading provider of patient care management solutions for the hospital and the home,” said Frans van Houten, CEO of Royal Philips. “BioTelemetry’s leadership in the large and fast growing ambulatory cardiac diagnostics and monitoring market complements our leading position in the hospital. Leveraging our collective expertise, we will be in an optimal position to improve patient care across care settings for multiple diseases and medical conditions.”
Post-Acquisition Plans
Upon completion of the transaction, BioTelemetry and its approximately 1,900 employees will become part of Philips’ Connected Care business segment. The acquisition is projected to be sales growth and adjusted EBITA margin accretive for Philips in 2021. Philips targets significant synergies driven by cross-selling opportunities (especially in the U.S.), geographical expansion, and portfolio innovation synergies, such as Philips’ Health Suite digital platform. Additionally, Philips will drive operational performance improvements through its proven productivity programs. The BioTelemetry business is expected to grow double-digits and to improve its Adjusted EBITA margin to more than 20% by 2025.
