Philips acquires US-based online cardiac care provider BioTelemetry for $2,8 bn
30 December 2020
Dutch healthcare technology major Royal Philips on Friday announced the signing of an agreement to acquire BioTelemetry Inc, a leading US-based provider of remote cardiac diagnostics and monitoring, for around $2.8 billion, or $72 per share.
Pursuant to the agreement, Philips will commence a tender offer to acquire all of the issued and outstanding shares of BioTelemetry for $72.00 each, to be paid in cash upon completion, ie, at a 16.5 perent premium to BioTelemetry’s closing price on 17 December. This translates to an enterprise value of $2.8 billion (approximately EUR 2.3 billion), inclusive of BioTelemetry’s cash and debt.
The board of directors of BioTelemetry has approved the transaction and recommended the offer to its shareholders. The board expects the transaction to be completed in the first quarter of 2021.
The acquisition of BioTelemetry will help Philips expand its cardiac care portfolio with integrated solutions. Philips is a leader in patient monitoring services in hospitals while BioTelemetry’s leading cardiac diagnostics and monitoring position outside the hospital. Te combination will make Philps a leader in patient care management both in the hospital and outside.
“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,” he added.
“Through continued innovation, we have developed the world’s largest remote cardiac monitoring services network,” said Joseph H. Capper, President and CEO of BioTelemetry. “We are delighted to become part of Philips and continue on our journey to deliver health information to improve the quality of life and reduce the cost of care. Combined with Philips’ current patient care management portfolio, innovation strength and global scale, we are perfectly equipped to address the rising demand for telehealth and remote monitoring solutions.”
BioTelemetry primarily focuses on the diagnosis and monitoring of heart rhythm disorders, representing 85 per cent of its sales. BioTelemetry’s clinically validated offering includes wearable heart monitors (eg 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 over $3 billion, growing high-single-digits driven by an increasing prevalence of chronic diseases, and the adoption of remote monitoring and outcome-oriented models.
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.
With 2019 sales of $439 million, 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 per cent by 2025.
Philips targets significant synergies driven by cross-selling opportunities (especially in the US), geographical expansion, and portfolio innovation synergies, such as Philips’ Health Suite digital platform.
The transaction is structured as a cash tender offer by Philips for all of the issued and outstanding shares of BioTelemetry, to be followed by a merger in which each share of BioTelemetry not tendered in the tender offer (other than shares that are held by Philips and certain of its affiliates, and BioTelemetry) will be converted into the $72 per share price paid in the tender offer.
The transaction is subject to customary closing conditions, including the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. The tender offer, however, is not subject to any financing conditions, Philips stated in a release