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| Thursday, June 15, 2006 |
Philips to Buy Intermagnetics General Corp. for $1.26 Billion
AMSTERDAM, Netherlands -- Royal Philips Electronics NV on Thursday launched a $1.3 billion cash offer for U.S. magnet maker Intermagnetics General Corp. as part of a strategy to strengthen its medical equipment division.
In a bid unanimously supported by the company's boards, Philips offered $27.50 per share for Intermagnetics, a 29 percent premium to Intermagnetics' Wednesday closing price of $21.38 on the Nasdaq Stock Market.
Latham, N.Y.-based Intermagnetics makes superconducting magnets used in magnetic resonance imaging, or MRI, systems. It had sales of $304 million in its last fiscal year ended in February.
Philips, which is the second-largest maker of medical equipment globally after General Electric Co., said it expects the acquisition will win customers in the short run, and improve the company's supply chain and development of new products in the long run.
"Through this acquisition, we will greatly strengthen the overall performance and innovation capability of our MRI business," Jouko Karvinen, chief executive of the Medical Systems unit, said in a statement.
In 2005, Philips bought U.S.-based medical company Stentor Inc. for $280 million to strengthen its position in the fast-growing market for clinical information technology. It also bought Lifeline Systems Inc. of the U.S. for $750 million to strengthen its consumer health business.
Philips shares rose 1.2 percent to 22.16 euros ($27.87) in Amsterdam trading.
Intermagnetics employs 1,150 people. Chief Executive Glenn Epstein will remain and lead the companies' merged MRI businesses with Latham as the new headquarters.
Philips said it would take an 85 million euro ($68 million) charge for integrating the company in the second half of 2006. |
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