Natus Acquires Embla Systems LLC - Leading Sleep Diagnostic Company
September 16 2011 - 7:00AM
Business Wire
Natus Medical Incorporated (Nasdaq:BABY) today announced
that it has acquired Embla Systems LLC, a leader in the
development, manufacturing, and sales of devices used in the
diagnosis of sleep apnea. Embla is the largest company in the world
focused solely on sleep diagnostics (Polysomnography or PSG and
Home Sleep Testing). The company offers a wide spectrum of
innovative sleep diagnostic solutions including Embletta home sleep
testing devices and three leading PSG platforms: Sandman,
REMbrandt, and RemLogic, and Enterprise Sleep Business Management
Systems. This breadth of product offerings provides a unique set of
tools to help optimize the efficiency of sleep labs.
Natus acquired all outstanding shares of Embla capital stock for
$16.1 million in cash, exclusive of direct costs of the
acquisition. Embla reported revenue of approximately $30 million
for its fiscal year ended December 31, 2010.
Natus expects the acquisition will be accretive to earnings in
2012, adding $0.08 to non-GAAP earnings per share for the year. The
non-GAAP results will exclude amortization of acquired intangible
assets and potential restructuring and other one-time charges
related to the acquisition.
“The Embla acquisition affirms our leadership position in
diagnostic neurology products,” said Jim Hawkins, Chief Executive
Officer of Natus. “With this acquisition, Natus will now hold the
number one position in the worldwide sleep diagnostic market with
annual revenue approaching $35 million.”
“Additionally, with approximately 40% of Embla’s revenue coming
from international markets, this acquisition positions Natus as the
leader in sleep diagnostics outside the United States,” added
Hawkins. “More than 100 million people worldwide are suspected to
have obstructive sleep apnea. Because of lack of awareness among
both patients and physicians more than 80% of those affected remain
undiagnosed.”
Natus funded the acquisition through available cash. The
purchase price is subject to adjustment based on net working
capital as of the purchase date.
Sleep Apnea
Sleep apnea is a sleep disorder characterized by abnormal pauses
in breathing or instances of abnormally low breathing during sleep.
There are three forms of sleep apnea: central (CSA), obstructive
(OSA), and complex or mixed sleep apnea (i.e., a combination of
central and obstructive) constituting 0.4%, 84% and 15% of cases
respectively. Studies have shown that as many as one in every 15
Americans is affected by at least moderate sleep apnea. One study
showed that in middle-age as many as 9% of women and 24% of men
were affected, undiagnosed, and untreated. Conditions linked to
obstructive sleep apnea include coronary artery disease, congestive
heart failure, hypertension, pulmonary hypertension, stroke, and
clinical depression, as well as other illnesses including asthma,
chronic obstructive pulmonary disease, and diabetes mellitus.
About Embla
Embla Systems began development of medical devices for the
detection of sleep apnea beginning in the mid 1990’s. The company
has consistently developed innovative products to assist sleep labs
in the diagnosis of the condition. In international markets the
company is a leader in devices used for sleep studies performed in
the patient’s home. With headquarters in Denver, Colorado, the
company also has facilities near Buffalo, New York; Ottawa,
Ontario, Canada; the Netherlands; and Germany.
Additional information about Embla can be found at
http://www.embla.com.
About Natus Medical
Natus is a leading provider of healthcare products used for the
screening, detection, treatment, monitoring and tracking of common
medical ailments in newborn care, hearing impairment, neurological
dysfunction, epilepsy, sleep disorders, and balance and mobility
disorders. Product offerings include computerized neurodiagnostic
systems for audiology, neurology, polysomnography, and neonatology,
as well as newborn care products such as hearing screening systems,
phototherapy devices for the treatment of newborn jaundice,
head-cooling products for the treatment of brain injury in
newborns, incubators to control the newborn's environment, and
software systems for managing and tracking disorders and diseases
for public health laboratories.
This press release contains forward-looking statements as
defined in the Private Securities Litigation Reform Act of 1995,
particularly statements regarding the expectations, beliefs, plans,
intentions and strategies of Natus. These forward-looking
statements include, but are not limited to, statements regarding
future revenue and contribution to earnings in 2012. These
statements relate to current estimates and assumptions of our
management as of the date of this press release. Future events or
Natus' future financial performance or results involve known and
unknown risks, uncertainties, and other factors that may cause
actual results, levels of activity, performance, or achievements to
differ materially from those expressed or implied by the
forward-looking statements, including the ability to successfully
integrate and operate the Medix business, competitive factors in
our markets, general economic conditions in our markets, and our
ability to produce and ship products in a timely manner. Natus
disclaims any obligation to update information contained in any
forward looking statement.
More information about potential risk factors that could affect
the business and financial results of Natus is included in Natus'
annual report on Form 10-K for the year ended December 31, 2010,
and its quarterly reports on Form 10-Q, and in other reports filed
from time to time by Natus with the U.S. Securities and Exchange
Commission.
Additional information about Natus Medical can be found at
www.natus.com.
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