Phillips to buy Respironics for 5.17 billion

yamdigger · Post by **yamdigger** » Fri Dec 21, 2007 1:43 am

This just in: Phillips to buy respironics.

http://www.reuters.com/article/business ... 3620071221

AMSTERDAM (Reuters) - Dutch Philips Electronics said on Friday it is to buy U.S. medical products company Respironics for 3.6 billion euros ($5.17 billion) or $66 per share to strengthen its healthcare business.

The transaction, which is expected to close in the first quarter of 2008, will be immediately accretive to sales growth and earnings before interest, tax and amortization (EBITA) margin to Philips and its healthcare unit, Philips said in a statement.

(Reporting by Foo Yun Chee)

Slinky · Post by **Slinky** » Fri Dec 21, 2007 5:20 am

Oh boy. I wonder what effect we will eventually see on Respironics equipment w/this sell out. And on American jobs.

Philips in $5 billion health equipment push

Philips has accelerated its drive into the health sector by acquiring an American sleeping disorder equipment maker

Carl Mortished, World Business Editor

Philips has agreed the takeover of Respironics, an American company that makes equipment to relieve sleep apnea, a condition that causes people to stop breathing during sleep.

The cash tender offer, worth $5.17 billion (£2.6 billion), accelerates the Dutch electronics firm’s drive to build a leading position in home medical technology where Philips has spent €2 billion (£1.4 billion) in two years.

Respironics makes diagnostic and therapeutic devices for patients suffering from sleep disorders.

It also makes equipment for ventilation and oxygen equipment for use in the home.

According to Philips, the worldwide market for equipment that treats respiratory disorders is worth more than $5 billion annually and is growing at a rate of 10 per cent a year.

Respironics had sales of $1.2 billion and claims a leading position in sleep apnea treatment, where the market for therapeutic equipment is growing at a rate of 17 per cent.

Gerard Kleisterlee, the chief executive of Philips, said that Respironic was an excellent fit and “another major milestone” in the company’s drive to build leading positions in the company’s three markets: healthcare, lighting and consumer lifestyle.

He said that Philips had spent €10 billion (£7.2 billion) on acquisition since 2005 and made or announced €10.2 billion in share repurchases.

The $66-a-share cash tender offer is the second medical deal for Philips this week. On Tuesday the Dutch company agreed to buy Visicu, an American medical systems and service provider.

In January 2006 it paid $750 million for Lifeline Systems, another US company, which makes emergency response devices to enable elderly people to summon assistance to their homes.

Two years ago Philips launched a big restructuring project, Vision 2010, intended to reshape the company from its position as a diverse electronics conglomerate to a company with legs in health technology, lighting equipment and consumer gadgetry.

It had been a research and technology-based group, and Mr Kleisterlee has sought to put marketing at the forefront with a focus on the consumer.

Philips is already a significant competitor in high-tech medical equipment, such as diagnostic scanners for hospitals, where it competes head-on with General Electric and Siemens.

The company has also invested heavily in equipment to enable patients to diagnose and treat conditions at home.

*The bold emphasis is mine - Slinky.

http://business.timesonline.co.uk/tol/b ... 082078.ece

I wonder WHO Philips considers the "consumer"? The end users (us) or the local DME suppliers?

DreamStalker · Post by **DreamStalker** » Fri Dec 21, 2007 6:30 am

Mr Rooster will be thrilled to hear the news ... woot woot!

SleeplessinCLE · Post by **SleeplessinCLE** » Fri Dec 21, 2007 7:12 am

hmm... No wonder we didn't have a Christmas party this year. Oh wait, our division never does.
In North America we have a saying about Philips and how it treats it's employees - If you ain't Dutch, You ain't much.

We've had lots of layoffs since we've become Philips. They are intensely bottom line orientated. Look for some of your equipment to change. Everything goes to the lowest bidder.

Wulfman · Post by **Wulfman** » Fri Dec 21, 2007 7:21 am

Hmmmmm......
As I read this on one of my two Philips 17" computer monitors, which I've had for quite a few years and haven't given me any problems .......some of my thoughts are:

Nothing surprises me anymore.
Whoever said it ain't about MONEY?!
Philips manufactures GOOD stuff. (I also have a Philips TV)
Maybe THEY have a better "vision" than Respironics did.

It'll be interesting to see what all shakes out in the next few years. I'm all stocked up with "stuff" for MY therapy.

Den

wildmt · Post by **wildmt** » Fri Dec 21, 2007 9:26 am

Well, if Phillips does to Respironics what they did to Norelco, better buy now. My new Phillips/Norelco expensive shaver ( not even top of the line ) doesn't shave near as well as my 5 year old one at a fraction of the cost.

Of course tough old guys have tough old beards and don't like change anyway.

tomjax · Post by **tomjax** » Fri Dec 21, 2007 9:34 am

Nice day for moi from resp and resmed

I am happy to see an increase of about 4800.00
in my holdings.

I told you all to buy this several times.

Hope it holds up.

Gotta decide.

should I sell and buy back on the dip or hold???

Snoredog · Post by **Snoredog** » Fri Dec 21, 2007 9:43 am

they could sure use the design expertise, lets hope they don't screw it up like they did with the Norelco electric razor, come to think of it, they screwed that company up after buying them, quality is in the toilet.

maybe cpap.com will pick up Somnotech's machines

WNJ · Post by **WNJ** » Fri Dec 21, 2007 9:47 am

wildmt wrote:Well, if Phillips does to Respironics what they did to Norelco, better buy now. My new Phillips/Norelco expensive shaver ( not even top of the line ) doesn't shave near as well as my 5 year old one at a fraction of the cost.
. . .

Phillips has owned Norelco for over 40 years.

I got my first Phillips/Norelco in 1967. Lasted for over 30 years. Second one is still going strong. Phillips makes good products.

If Respironics had been acquired by General Electric . . . that would be reason to worry. I've refused to buy anything by GE for over 35 years. To me, that name is synonymous with shoddy.

Wayne

Snoredog · Post by **Snoredog** » Fri Dec 21, 2007 9:54 am

WNJ wrote:
wildmt wrote:Well, if Phillips does to Respironics what they did to Norelco, better buy now. My new Phillips/Norelco expensive shaver ( not even top of the line ) doesn't shave near as well as my 5 year old one at a fraction of the cost.
. . .
Phillips has owned Norelco for over 40 years.

I got my first Phillips/Norelco in 1967. Lasted for over 30 years. Second one is still going strong. Phillips makes good products.

If Respironics had been acquired by General Electric . . . that would be reason to worry. I've refused to buy anything by GE for over 35 years. To me, that name is synonymous with shoddy.

Wayne

Wulfman · Post by **Wulfman** » Fri Dec 21, 2007 10:24 am

The only electric shaver I've ever owned was a Remington.....about 40 years ago.
I liked it so well, I SOLD the company.

Have been a confirmed shaving mug/soap/brush/razor user ever since. (and have a collection of shaving mugs)

Den

Goofproof · Post by **Goofproof** » Fri Dec 21, 2007 10:34 am

Wulfman wrote:Hmmmmm......
As I read this on one of my two Philips 17" computer monitors, which I've had for quite a few years and haven't given me any problems .......some of my thoughts are:

Nothing surprises me anymore.
Whoever said it ain't about MONEY?!
Philips manufactures GOOD stuff. (I also have a Philips TV)
Maybe THEY have a better "vision" than Respironics did.

It'll be interesting to see what all shakes out in the next few years. I'm all stocked up with "stuff" for MY therapy.

Den

I used to be leary about Philips, until I bought their DVD Player, DVP5982 HDMI. It's one of the few on the market that has USB input, and DIVX support. It plays nearly anything, it can be hacked into playing all regions (0), the firmware is upgradable by the user if they have a cd burner. Their are things I'd like them to improve, like using USB 2, and a move from DOS file limitations.

For the $$$ under $65, it's state of the art, and miles ahead of the competition. I hook a My Book 750 gig drive to it and have 1,000 hours of Video at my command, no ad's. Far better picture than I can get with cable or my Sat Dish.

I can't wait for my new Remstar with the usb port on the front, or maybe Bluetooth. Jim

I have bought 6 of these units, just in case, but never seen one go bad.

Wulfman · Post by **Wulfman** » Fri Dec 21, 2007 11:15 am

From the Respironics website:

http://global.respironics.com/News/philips.asp

ROYAL PHILIPS ELECTRONICS TO ACQUIRE RESPIRONICS FOR USD $66.00 PER SHARE

MURRYSVILLE, PA, December 21, 2007 — RESPIRONICS, INC. (NASDAQ/NMS Symbol: RESP) today announced it has entered into a definitive merger agreement pursuant to which Royal Philips Electronics (AEX: PHI, NYSE: PHG) (Philips) will commence a tender offer to acquire all of the outstanding shares of Respironics for USD 66.00 in cash per share, or a total purchase price of approximately USD 5.1 billion. The offer price represents a premium of approximately 31% over Respironics’ average closing share price for the thirty trading days ended December 20, 2007. The Board of Directors of Respironics has unanimously approved the transaction and recommends that Respironics shareholders accept and tender their shares into the offer. The tender offer is expected to commence by January 8, 2008 and is subject to customary conditions, including the tender of at least a majority of the shares and the receipt of U.S. and European regulatory approvals. The offer is not subject to any financing contingency, and the transaction is expected to be completed in the first quarter of 2008.

Respironics is a global leader in the treatment of Obstructive Sleep Apnea (OSA), a sleep disorder characterized by the repeated cessation of breathing during sleep. It is estimated that in the United States alone there are 18 – 20 million sufferers of moderate or severe OSA of which only 15 – 20% have been diagnosed. Research in recent years has shown a link between OSA, heart disease, stroke and diabetes. Additionally, the company has a leading position in noninvasive ventilation and has recently introduced new home oxygen technologies to serve the needs of respiratory impaired patients in the home. The remainder of the Company’s business is focused on the hospital channel and includes noninvasive and invasive ventilation, respiratory monitoring, neonatal products and respiratory drug delivery technologies for the treatment of respiratory diseases.

Upon closing, Respironics will become the headquarters for Philips Home Healthcare Solutions group within Philips Healthcare, and Respironics’ senior operating leadership are expected to remain with the organization and will continue to lead and manage the business. Philips has made a number of successful acquisitions in the area of Home Healthcare so far including Lifeline Systems, Health Watch and Raytel Cardiac Services. Today, Philips Home Healthcare Solutions supports almost one million at-risk seniors, either in their own homes or in senior living facilities throughout the U.S. and Canada.

“The transaction we are announcing today will deliver superior and certain value to Respironics’ shareholders,” said John L. Miclot, President and Chief Executive Officer of Respironics. “The combination of Respironics and Philips will allow us to continue to provide exceptional products and services to our customers and allow Respironics to expand its leadership in the global sleep and respiratory markets. Philips is the right partner to create additional growth opportunities for our company, and we believe that our organization will benefit significantly by being part of a larger, growing and dynamic organization. We look forward to working with the Philips team to ensure an effective and seamless transition.”

“A core part of Philips’ healthcare strategy is to achieve a leading position in the high growth sector of home healthcare,” Steve Rusckowski, Chief Executive Officer of Philips Healthcare and member of the Board of Management of Philips Electronics, said. “This acquisition, with its significant strategic and financial benefits to Philips Healthcare, is another important step in carrying out this strategy.” Upon completion of this acquisition, Respironics will become the centerpiece of Home Healthcare Solutions, which will form part of Philips Healthcare as of January 1, 2008.

* * * * *

Respironics is a leading developer, manufacturer and distributor of innovative products and programs that serve the global sleep and respiratory markets. Focusing on emerging market needs, the Company is committed to providing valued solutions to help improve outcomes for patients, clinicians and health care providers. Respironics markets its products in 141 countries and employs more than 5,300 associates worldwide. Further information can be found on the Company’s Web site: http://www.respironics.com.

Royal Philips Electronics of the Netherlands (NYSE: PHG, AEX: PHI) is a global leader in healthcare, lighting and consumer lifestyle, delivering products, services and solutions through the brand promise of “sense and simplicity”. Headquartered in the Netherlands, Philips employs approximately 128,000 employees in more than 60 countries worldwide. With sales of EUR 27 billion in 2006, the company is a market leader in medical diagnostic imaging and patient monitoring systems, energy efficient lighting solutions, personal care and home appliances, as well as consumer electronics. News from Philips is located at http://www.philips.com/newscenter.

FORWARD-LOOKING STATEMENT
This release may contain certain forward-looking statements with respect to the financial condition, results of operations and business of Respironics and certain of the plans and objectives of Respironics with respect to these items, including without limitation completion of the tender offer and merger. Completion of the tender offer and merger are subject to conditions, including satisfaction of a minimum tender condition and the need for regulatory approvals, and there can be no assurance those conditions can be satisfied or that the transactions described in this press release will be completed. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future and there are many factors that could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements.

Additional Information
The tender offer described in this press release has not yet commenced, and this press release is neither an offer to purchase nor a solicitation of an offer to sell Respironics common stock. Investors and security holders are urged to read both the tender offer statement and the solicitation/recommendation statement regarding the tender offer described in this press release when they become available because they will contain important information. The tender offer statement will be filed by a wholly-owned subsidiary of Philips Holding USA Inc., which is a wholly-owned subsidiary of Royal Philips Electronics, with the Securities and Exchange Commission (“SEC”) and the solicitation/recommendation statement will be filed by Respironics with the SEC. Investors and security holders may obtain a free copy of these statements (when available) and other documents filed by Philips or Respironics with the SEC at the website maintained by the SEC at http://www.sec.gov. The tender offer statement and related materials, solicitation/recommendation statement, and such other documents may be obtained for free by directing such requests to Investor Relations of Respironics at 1010 Murry Ridge Lane, Murrysville, PA 15668.

© 2007 Respironics, Inc. and its affiliates. All rights reserved.

DreamStalker · Post by **DreamStalker** » Fri Dec 21, 2007 11:20 am

I don't have an electric razor ... never had and never will

The only Phillips products I own are Phillips screw drivers (about 4 or 5 of 'em)

In the early 80's, I worked for Shell, a competitor of Phillips 66, but that was only for a year ... and I have never worked for a multinational corporation since I think my karma has been good to me because of my choice (well except for having OSA and not having any money ) ... but life is relatively good!

With the exception of a non-Phillips/Respironics mask now and then, I have all the PAP equipment I will need for a decade or so.

JeffH · Post by **JeffH** » Fri Dec 21, 2007 2:57 pm

This is going to be a growing tread in this country in that the dollar isn't worth anything, so many countries have an over supply of worth / less dollars and they need to do something with them.

The changes that have happened in this country in my short 51 years on this planet are amazing. When I was a kid we had tariffs and we had companies that made things, and therefore, we had JOBS!

Not any more...

JeffH

Mask

Additional Comments: Equipment isn't correct, S9 ASV w/H5i