Royal Philips Electronics today announced plans to buy Intermagnetics General Corp. through a deal totaling approximately $1.3 billion. Completion of the transaction is subject to the usual regulatory approval.
Intermagnetics develops, manufactures and markets high-field superconducting magnets used in magnetic resonance imaging (MRI) systems. Intermagnetics also provides specialized MRI compatible patient monitoring devices and Radio Frequency (RF) coils that are predominantly supplied to hospitals.
This is a move by Philips to fortify its position in the MRI market. It will allow Philips to significantly rationalize its supply chain, to enhance its competitive position and to participate in the fast growing market for RF coils, the company said.
"Through this acquisition, we will greatly strengthen the overall performance and innovation capability of our MRI business," said Jouko Karvinen, member of the Board of Management, CEO of Medical Systems, Philips. "In the short term, we expect to gain equipment market share and to grow the installed base by expanding our product offerings with an accelerated innovation rate and a lower cost supply chain.
“Intermagnetics' leading positions in the high-growth and high-value markets of RF coils and MRI patient monitoring will enable us to build unique solutions for our customers," Karvinen added. “In the longer term, we believe that MRI technology will become important in molecular imaging, therefore positioning us well for the future."
Philips also stands to benefits from the technology offerings of SuperPower, Intermagnetics' Energy Technology subsidiary. At this time, Philips doesn’t seem to have a definite plan for the unit.
“We will now be better positioned to align our core strengths in the design and manufacture of superconducting magnets, RF coils and MRI compatible patient monitors with Philips' deep expertise in MRI system design and clinical applications,” said Glenn H. Epstein, chairman and CEO, Intermagnetics.
Partnership between the two companies dates back many years. In May, they signed a 5-year agreement making Intermagnetics the exclusive developer and supplier of advanced superconductive magnet systems for Philips MRI systems.
On news of the acquisition, Intermagnetics stock soared 27 percent today. Philips will pay $27.50 a share, which represents a 29 percent premium over Intermagnetics' closing price of $21.38 yesterday, according to TheStreet.com. Philips shares rose 1.2 percent to 22.16 euros ($27.87) in Amsterdam trading.
Intermagnetics employs approximately 1,150 people. Its headquarters in Latham, N.Y., will become the global headquarters of Philips' enlarged Magnetic Resonance business. Upon the completion of the acquisition, Epstein will join Philips to lead the MRI business and the integration process. He will report to Steve Rusckowski, CEO of Philips Medical Imaging Systems. Intermagnetics began in 1971 as the spin off of General Electric’s superconducting products business.
It isn’t known how the acquisition will effect the November 2005 strategic partnership signed between Intermagnetics subsidiary Invivo Corp. and Siemens Medical Solutions under which Invivo’s computer-aided-detection (CAD) system is being integrated with Siemens’ MAGNETOM MRI systems for breast MRI applications.
For a current financial profile of Intermagnetics General, visit: http://www.google.com/finance?q=IMGC.