Dutch health technology company Philips is set to buy US cardiac diagnostics and monitoring firm BioTelemetry in a $2.8 billion deal that will strengthen its offering of remote care products.
Philips said on Friday it would pay $72 per outstanding BioTelemetry share in cash, in an offer supported by the US company's board at a 16.5% premium to the stock's closing price on Thursday.
Philips shares gained 2% in early trading, making them one of the biggest risers on Amsterdam's blue chip AEX-index.
BioTelemetry, which has around 1,900 employees, primarily focuses on the diagnosis and remote monitoring of heart rhythm disorders, a business that represented 85% of its $439 million sales last year.
It will become part of Philips' connected care business, which offers a range of platforms and devices that allow patients to stay at home while being monitored.
Philips banks on rising life expectancy and associated chronic diseases to make this business a pillar for future growth. This year the Covid-19 pandemic led to a surge in demand for remote monitoring solutions.
"We have always been very optimistic about connected care," Chief Executive Frans van Houten told reporters.
"With Covid we have seen an acceleration of the demand and we think this acquisition fits perfectly in this era where remote patient monitoring will become ever more important."
Once a sprawling conglomerate, Philips has become purely focused on healthcare after spinning off its lighting and consumer electronics divisions in recent years.
Philips said BioTelemetry was expected to deliver double-digit growth and improve its adjusted earnings before interest, tax and amortisation (EBITA) margin to more than 20% by 2025.
The company, which expects to complete the purchase in the first quarter of 2021, said the acquisition would have boost its own sales growth and profit margin from next year.