Holy Crap! Royal Philips Electronics Is Buying Respironics

This is great news for the Buy List. I love Respironics (RESP) and the stock has been very good to us. The deal is for $66 a share, which is a 24.3% premium.
Here’s more from the WSJ:

Royal Philips Electronics of The Netherlands Friday said it would acquire U.S.-based health care firm Respironics Inc. for €3.6 billion ($5.1 billion) in cash.
In joint statements, the companies said they had reached a definitive merger agreement under which Philips will acquire all of Respironics’ outstanding shares for $66 a share, or a 24.3% premium to Thursday’s closing price for Respironics of $53.11.
The deal marks the second U.S. acquisition for the Dutch company this week. Tuesday, Philips said it would buy U.S. clinical information-technology and service provider Visicu Inc. for about €290 million in cash. Visicu enables critical care medical staff to actively monitor patients in hospital intensive care units from remote locations. And on Dec. 4, Philips announced the purchase of another U.S. clinical IT company, Emergin Inc. for an undisclosed amount. Emergin sells software to rapidly transmit medical alarm signals throughout hospitals, Philips said.
Respironics, of Murrysville, Penn., provides sleep therapy and respiratory health-care solutions. Over a 12-month period ending in September, 2007, Respironics reported sales of approximately $1.2 billion. It has around 5,300 employees world-wide.
“Respironics is an excellent strategic fit and will significantly drive our growth in health care both in the hospital and in the home,” said Gerard Kleisterlee, Philips’s president and chief executive, in a statement. “The acquisition of Respironics is another major milestone towards the completion of our objective to build market leadership positions in high-growth, high-margin businesses across the three market sectors of health care, lighting and consumer lifestyle.”
The Amsterdam-based company, which makes a wide range of products from shavers and televisions to medical scanners and light-emitting diodes, has in recent years transformed itself from an electronics manufacturing company into a technology company focused on lifestyle and health. In September, the company launched its “Vision 2010” strategic plan, under which it will simplify its structure into three core sectors: Philips Healthcare, Philips Lighting, and Philips Consumer Lifestyle.
Several divestments have left the company with a cash pile of several billion euros. The company said Tuesday it would buy back up to €5 billion of its own shares.
The tender offer is expected to commence by Jan. 8, 2008, and isn’t subject to any financing contingency. It requires U.S. and European Union regulatory clearances. The transaction is expected to close in the first quarter of 2008, upon which Respironics will become the headquarters for Philips Home Healthcare Solutions group within Philips Healthcare.

Here’s an old post I did on RESP from a year ago.

Posted by on December 21st, 2007 at 9:19 am


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