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news release:
Philips to Acquire Intermagnetics, the World's
Leading MRI Components and Accessories Manufacturer
Amsterdam, Netherlands, June 15: Royal Philips Electronics (NYSE:
PHG) today
announced it has signed a definitive agreement with Intermagnetics General
Corporation ("Intermagnetics") (NASDAQ:
IMGC) under
which Philips will acquire Intermagnetics for USD 27.50 per share or a total
equity value of approximately USD 1.3 billion (EUR 1 billion) to be paid in cash
upon completion. The Board of Directors of Intermagnetics has unanimously
approved the proposed transaction. Completion of the transaction is subject to
regulatory approval, to the terms and conditions of the merger agreement and to
the approval of Intermagnetics' shareholders.
Intermagnetics develops, manufactures and markets high-field superconducting
magnets used in Magnetic Resonance Imaging (MRI) systems and is viewed as the
technological innovator in this market. Intermagnetics also provides specialized
MRI compatible patient monitoring devices and Radio Frequency (RF) coils that
are predominantly supplied to hospitals.
The acquisition of Intermagnetics will strengthen Philips' position in the key
market of Magnetic Resonance Imaging. 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. Philips anticipates the
transaction to be accretive to its operating margin towards the end of 2007.
There will be a one-time charge of approximately EUR 85 million related to
in-process R&D expenses, integration of supply chain and various purchase
accounting items, taken in the latter half of 2006. For the last four quarters
ended February 26, 2006, Intermagnetics' revenues were USD 304 million.
"Through this acquisition, we will greatly strengthen the overall performance
and innovation capability of our MRI business," said Jouko Karvinen, member of
the Philips Board of Management and CEO of Medical Systems. "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," he 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 recognizes the benefits offered by the breakthrough technology of
SuperPower, Intermagnetics' Energy Technology subsidiary, and will actively
consider the most effective way to achieve its potential.
Glenn H. Epstein, chairman and chief executive officer of Intermagnetics General
Corporation said: "Our Board of Directors unanimously feels that this is the
logical next-stage for Intermagnetics. 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. This is truly a unique opportunity
where another clear winner is the MRI business in general."
Intermagnetics employs approximately 1,150 people. Its headquarters in Latham,
New York will become the global headquarters of Philips' enlarged Magnetic
Resonance business. Upon completion of the acquisition, Glenn H. 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.
Magnetic Resonance Imaging is one of the key imaging technologies in radiology
departments in hospitals. In 2005, total MRI market was approximately EUR 5
billion, and consisted of MRI systems, services and accessories (such as RF
coils). Over the past 10 years, the number of MRI procedures grew on average by
10 percent per year. This has been driven by an increasing number of diagnostic
applications. Magnetic resonance imaging is radiation free, and is the preferred
technique for high-resolution imaging of the brain, spine, abdomen, breast,
prostate, blood vessels, and of all joints in the body.
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