Philips to Acquire Agilent Technologies' Healthcare Solutions Group for $ 1.7 Billion
AMSTERDAM, The Netherlands, and PALO ALTO, California--(BUSINESS WIRE)--November 17, 2000--Royal Philips Electronics (AEX: PHI, NYSE: PHG) and Agilent Technologies Inc. (NYSE: A) announced today that Philips has agreed to acquire Agilent Technologies' Healthcare Solutions Group (HSG) for $ 1.7 billion. The transaction is subject to customary regulatory approvals and other closing conditions.
The acquisition of HSG would enable Philips Medical Systems (PMS) to extend its scope considerably and to enter into new, high growth segments, including automatic external defibrillators and home care technology, enabling remote diagnostics. Also, PMS' brand position with leading hospitals and healthcare institutions worldwide, and particularly in North America, would be strengthened.
HSG's portfolio of over 400 healthcare products and services is an excellent complement to PMS' product line. With its Hewlett-Packard heritage of innovation, HSG has a strong position in the healthcare markets it serves. With annual sales of $ 1.5 billion, the company's products include patient monitoring, ultrasound imaging, resuscitation, information management and other services and supplies used in many healthcare areas - from inpatient and outpatient facilities to emergency rooms, physicians' offices, the workplace and the home.
Philips Medical Systems is a leader in diagnostic imaging and related services and offers a robust portfolio, including Catherization Labs, MR, CT, X-ray, and ultrasound systems, as well as information technology solutions that address the radiology, general imaging, surgical and cardiovascular markets. PMS' sales in the first nine months of 2000 amounted to EUR 2.0 billion. Through this merger PMS reinforces its commitment to provide the global healthcare market with a wide array of best-in-class, disease specific products and services.
Cor Boonstra, President and CEO of Royal Philips Electronics commented: "After the completion of this transaction, we will have invested over $ 4 billion in our Medical Systems business over the past two years. This will put Philips Medical Systems in a good position to be a strong world player in this industry and provide our shareholders with a valuable proposition to generate significant value. PMS will integrate its new acquisitions after their completion in the best interest of its customers, employees and shareholders."
"In order to meet customer needs in today's healthcare marketplace, we believed we had to offer a broader range of solutions, and that required substantial investment," said Ned Barnholt, Agilent's President and CEO. "We realized we either had to make a commitment to invest heavily in HSG's future or sell the unit to a company with a complementary business and a commitment to invest in the ongoing success of the businesses. This agreement also underscores Agilent Technologies' commitment to aggressively manage its business portfolio and focus on the communications and life sciences markets." "We regard this agreement as a win for our customers, our shareholders and our companies," added Barnholt. "Philips is a world-class organization, and the combined companies will provide customers with leadership products and solutions across a broader product spectrum."
"We have worked with Hewlett-Packard/Agilent's Healthcare Solutions Group in various ways for many years, and have come to know it as an excellent, customer-driven company, highly respected for its ability to apply advanced technology to healthcare problems," said Hans Barella, President and CEO of Philips Medical Systems. "We believe there is an excellent cultural fit with the people of HSG. By combining the two companies' ranges of products and services, we will be able to offer our customers more disease-specific solutions, helping to improve patient outcome and efficiency."
HSG employs approximately 5,000 people and operates in more than 100 countries around the world. Its present manufacturing facilities are in North America, Germany and China.
For the first three quarters of its current financial year ended July 31, 2000, HSG reported net revenues of $ 1.053 million and operating losses of $ 53 million (including one-time charges associated with the separation of Agilent from Hewlett-Packard Company). The company announced a major global restructuring program in August of this year, which is expected to lead to improved operational performance.
The transaction is expected to close in the next several months.
Agilent Technologies Inc. (NYSE: A) is a diversified technology company with approximately 46,000 employees serving customers in more than 120 countries. Agilent Technologies is a global leader in designing and manufacturing test, measurement and monitoring instruments, systems and solutions, and semiconductor and optical components. In fiscal year 1999, Agilent had net revenue of more than
8.3 billion. The company serves markets that include communications, electronics, life sciences and healthcare. www.agilent.com
Philips Medical Systems is a leading supplier of diagnostic imaging systems and related services worldwide, represented in more than 100 countries and employing 11,800 people. A worldwide network of research and development and sales and service organizations backs PMS' products. PMS is part of Philips, one of the world's largest electronics companies. Additional information on PMS can be obtained by visiting its homepage at www.medical.philips.com
Royal Philips Electronics of the Netherlands is one of the world's biggest electronics companies and Europe's largest, with sales of EUR 31.5 billion in 1999. It is a global leader in color television sets, lighting, electric shavers, color picture tubes for televisions and monitors, and one-chip TV products. Its 232,000 employees in more than 60 countries are active in the areas of lighting, consumer electronics, domestic appliances, components, semiconductors and medical systems. Philips is quoted on the NYSE (symbol: PHG), London, Frankfurt, Amsterdam and other stock exchanges. News from Philips is located at www.news.philips.com
Safe Harbor Statement
This news release contains forward-looking statements, including without limitation statements relating to completion of the transaction, future business strategies, that involve risks and uncertainties that could cause results of Agilent Technologies to differ materially from management's current expectations. These risks are detailed in Agilent's Annual Report on Form 10-K for the year ended October 31, 1999, and its Quarterly Report on Form 10-Q for the quarter ended July 31, 2000, as filed with the Securities and Exchange Commission.
CONTACT:
Philips Corporate Communications
Ben Geerts, +31 20 5977215
or
Agilent Corporate
Amy Flores, 650/752-5303
or
Agilent's Healthcare Solutions Group
Heidi Wilson, 978/659-7302
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