GE Healthcare to acquire Vital Signs, Inc., expanding GE's monitoring, anesthesia and respiratory care offerings
25 July 2008
General Electric's healthcare unit, yesterday announced plans to acquire maker of single-use medical-devices Vital Signs Inc for shareholders $74.50 per share in cash - above the 52-week high of $61.20 reached on 9 May, representing a 28.4 per cent premium to its closing price on Wednesaday.
The offer values Vital Signs at approximately $860 million, net of Vital Signs cash and investments as of 31 March 2008. Shareholders holding approximately 37 per cent of Vital Signs' outstanding common stock have agreed, among other things, to vote their shares in favour of the proposed transaction.
Vital Signs is a global provider of medical products applicable to a wide range of care areas such as anesthesia, respiratory, sleep therapy and emergency medicine, with a broad product offering of innovative single-patient use products which offer significant cost advantages and improved patient care features, including reducing the potential of transmitting infections from one patient to another.
The acquisition would expand GE Healthcare's $17-billion operation into the single-use products market. By buying Vital Signs, GE, which makes high-tech medical equipment such as machines that administer anesthesia, will add a new revenue stream from single use medical supplies or those that cannot be reused on more than one patient.
Vital Signs will become part of GE Healthcare's Clinical Systems business, a world-class provider of advanced technologies for patient monitoring, anesthesia delivery and acute respiratory care. The strong strategic fit between the two businesses will offer substantial customer benefits through complementary product and service offerings.
"This acquisition is consistent with GE's strategy to invest in high-technology, innovative businesses that deliver top-line growth, earnings expansion and expanded margins," said John Dineen, president and CEO of GE Healthcare. "Vital Signs has consistently grown at double-digit rates while generating strong operating margins. Its products are a great complement to our existing anesthesia, monitoring and respiratory offerings."
