AMSTERDAM and SAN DIEGO, Dec. 17,
2014 /PRNewswire/ -- Royal
Philips (NYSE: PHG; AEX: PHIA) and Volcano Corporation
(NASDAQ:VOLC), a global leader in catheter-based imaging and
measurement solutions for cardiovascular applications, today
announced that they have entered into a definitive merger
agreement. Pursuant to the agreement, Philips will commence a
tender offer to acquire all of the issued and outstanding shares of
Volcano for USD 18.00 per share, or a
total equity purchase price of USD 1
billion (approx. EUR 800
million), to be paid in cash upon completion. The board of
directors of Volcano has unanimously approved the transaction and
recommends the offer to its shareholders. The transaction is
expected to close in the first quarter of 2015.
In the last few years, Philips has created a leading
image-guided therapy business through strategic investments in
R&D, partnerships and technology licenses. Today, Philips has a
rich portfolio of interventional imaging equipment, navigation
tools, and services, and a sizeable global customer base, including
each of the top 50 U.S. Heart Surgery and Cardiology hospitals. One
in every three interventional X-ray systems sold globally is a
Philips system. These systems provide the visual maps that allow
the clinician to guide thin, tube-shaped instruments called
catheters through the body, to the area of interest and perform the
minimally invasive treatment.
In image-guided treatments of the heart and blood vessels, there
is an increasing trend to use advanced catheters that are capable
of producing ultrasound images of the interior of blood vessels
(intravascular ultrasound or IVUS) or perform blood flow
measurements (fractional flow reserve or FFR). There is a growing
body of clinical evidence that the use of such technologies in
conjunction with interventional X-ray helps improve procedural
outcomes.
With 2013 sales of approximately USD 400
million, San Diego,
California-based Volcano is a leader in catheter–based
imaging and measurements for minimally invasive diagnostics and
treatment of coronary artery disease and peripheral vascular
disease. Volcano is the only company in the industry with a leading
position in both IVUS imaging and FFR measurements. In
addition, the company possesses the broadest product portfolio
around these two technologies, a leading IP position and a nascent
peripheral vascular therapeutics business that targets a segment
with a double-digit growth rate.
The combination of two industry leaders will create new sources
of recurring revenue streams and increase sales growth for Philips
in the EUR 4 billion image-guided
therapy market opportunity. Sales growth will be accelerated
through Volcano's close customer relationships associated with its
disposable products and channel synergies that will create
cross-selling opportunities between both companies' existing
customer bases. Furthermore, the combination of Volcano's proven
clinical development and commercialization capabilities with
Philips' next generation of imaging and measurement technologies,
will allow Philips to introduce new solutions in higher growth
segments such as the minimally invasive treatment of heart rhythm
disorders and structural heart diseases. These are promising
segments growing at double-digit rates.
"The agreement to acquire Volcano significantly advances our
strategy to become the leading systems integrator in image-guided
therapies," said Frans van Houten,
Chief Executive Officer of Royal
Philips. "Volcano's impressive and unique product portfolio
is highly complementary to our strong offering in live
image-guidance solutions, creating an opportunity to accelerate the
revenue growth for our image-guided therapy business to a high
single-digit rate by 2017. Our combined sales forces will be able
to capture immediate cross selling opportunities, while our joint
R&D teams will be able to develop new solutions to address
significant unmet needs in the minimally invasive treatment of
cardiovascular diseases."
Mr. Van Houten added:
"Image-guided therapies provide significant benefits for healthcare
systems and patients, including reduced patient trauma, shorter
recovery times and hospital stays, and lower costs. As a result,
our clinical partners and customers are asking for a tighter
integration of imaging and measurement technologies to enable such
therapies. This transaction allows us to provide our customers with
an integrated solution to improve procedural outcomes at a decisive
stage in the health continuum."
"I am very excited that Volcano will become part of Philips and
join forces with its leading image guided therapy business," said
Scott Huennekens, Volcano President
and Chief Executive Officer. "This transaction will be beneficial
for our shareholders, customers, partners and employees. There
is a large and growing global market opportunity for image-guided
therapies, and as part of Philips, we gain the scale and resources
needed to accelerate our goals of improving patient outcomes on a
global basis, lowering cost and delivering innovative diagnostics
and therapies in the coronary and peripheral markets. In addition,
our shared expertise in the image-guided therapy market will allow
us to further globalize our leading IVUS and FFR product offerings
and enter new product areas. We look forward to working
closely with Philips and ensuring a smooth transition and
closing."
Upon completion of the transaction, the Volcano business and its
1,800 employees will be part of a dedicated, new image-guided
therapy business group within Philips, which will be led by Philips
executive Bert van Meurs, an
experienced leader in the health care industry with a proven track
record in the image-guided therapy market.
Financials
The acquisition will create a
strategically and financially compelling combination that will
provide higher growth, additional operating leverage through more
productive sales operations, and enhance commercialization
opportunities in new, adjacent segments. Philips will drive
operational performance improvements through cost synergies and the
implementation of proven productivity improvement methodologies
such as Lean. As a result, the transaction is expected to be
accretive to Philips' reported earnings per share by 2017, and
Philips targets an EBITA margin for its image-guided therapy
business group of around 20% by 2017.
The transaction is structured as a cash tender offer by Philips
for all of the issued and outstanding shares of Volcano, to be
followed by a merger in which each share of Volcano not tendered in
the tender offer will be converted into the USD 18.00 per share price paid in the tender
offer. Pursuant to the merger agreement, the transaction is subject
to customary closing conditions, including certain regulatory
clearances in the US and in certain non-US jurisdictions. The
tender offer is not subject to any financing conditions. Philips
intends to finance the acquisition through a combination of cash on
hand and the issuance of debt.
About Royal Philips
Royal Philips (NYSE: PHG, AEX: PHIA)
is a diversified health and well-being company, focused on
improving people's lives through meaningful innovation in the areas
of Healthcare, Consumer Lifestyle and Lighting. Headquartered in
the Netherlands, Philips posted
2013 sales of EUR 23.3 billion and
employs approximately 115,000 employees with sales and services in
more than 100 countries. The company is a leader in cardiac care,
acute care and home healthcare, energy efficient lighting solutions
and new lighting applications, as well as male shaving and grooming
and oral healthcare. News from Philips is located at
www.philips.com/newscenter.
About Volcano Corporation
Through its
multi-modality platform, Volcano is the global leader in
intravascular imaging for coronary and peripheral therapeutic
devices. The company's broad range of technologies makes imaging
and therapy simpler, more informative and less invasive and offers
physicians and their patients around the world with
industry-leading tools that aid diagnosis and guide and provide
therapy. Founded in cardiovascular care and expanding into other
specialties, Volcano is focused on improving patient and economic
outcomes. For more information, visit the company's website at
www.Volcanocorp.com.
Forward-looking statements
This release may
contain certain forward-looking statements with respect to the
financial condition, results of operations and business of Philips
and certain of the plans and objectives of Philips with respect to
these items, including without limitation completion of the tender
offer and merger and any expected benefits of the merger, and
certain forward-looking statements regarding Volcano, including
without limitation with respect to its business, the proposed
tender offer and merger, the expected timetable for completing the
transaction, and the strategic and other potential benefits of the
transaction. 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 that those conditions can be satisfied or that the
transactions described in this release (the "Transactions") will be
completed or will be completed when expected. Often, but not
always, forward-looking statements can be identified by the use of
words such as "plans," "expects," "expected," "scheduled,"
"estimates," "intends," "anticipates," "projects," "potential,"
"continues" or "believes," or variations of such words and phrases
or state that certain actions, events, conditions, circumstances or
results "may," "could," "should," "would," "might" or "will" be
taken, occur or be achieved. 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. These factors include, but are
not limited to, (i) the risk that not all conditions of the Offer
or the merger will be satisfied or waived; (ii) uncertainties
regarding the two companies' ability to successfully market both
new and existing products; (iii) uncertainties relating to the
anticipated timing of filings and approvals relating to the
Transactions; (iv) uncertainties as to the timing of the tender
offer and merger; (v) uncertainties as to how many of Volcano's
stockholders will tender their stock in the tender offer; (vi) the
possibility that competing offers will be made; (vii) the failure
to complete the tender offer or the merger in the timeframe
expected by the parties or at all; (viii) the outcome of legal
proceedings that may be instituted against Volcano and/or others
relating to the Transactions; (ix) Volcano's ability to maintain
relationships with employees, customers, or suppliers;
(x) domestic and global economic and business conditions;
(xi) developments within the euro zone; (xii) the
successful implementation of Philips' strategy and the ability to
realize the benefits of this strategy; (xiii) legal claims;
(xiv) changes in exchange and interest rates;
(xv) changes in tax rates, raw materials and employee costs;
(xvi) the ability to successfully exit certain businesses or
restructure the operations; (xvii) the rate of technological
changes; (xviii) political, economic and other developments in
countries where Philips operates; (xix) industry consolidation
and competition; and (xx) other risk factors described in Volcano's
Annual Report on Form 10-K and Quarterly Reports on Form 10-Q filed
with the United States Securities and Exchange Commission ("SEC").
Any forward-looking statements in this release are based upon
information known to Philips on the date of this announcement.
Neither Philips nor Volcano undertakes any obligation to publicly
update or revise any forward-looking statement, whether as a result
of new information, future events or otherwise.
Additional Information
The tender offer described in this communication (the "Offer")
has not yet commenced, and this communication is neither an offer
to purchase nor a solicitation of an offer to sell any shares of
the common stock of Volcano or any other securities. On the
commencement date of the Offer, a tender offer statement on
Schedule TO, including an offer to purchase, a letter of
transmittal and related documents, will be filed with the SEC by
Philips and a Solicitation/Recommendation Statement on Schedule
14D-9 will be filed with the SEC by Volcano. The offer to purchase
shares of Volcano common stock will only be made pursuant to the
offer to purchase, the letter of transmittal and related documents
filed as a part of the Schedule TO. INVESTORS AND SECURITY HOLDERS
ARE URGED TO READ BOTH THE TENDER OFFER STATEMENT AND THE
SOLICITATION/RECOMMENDATION STATEMENT REGARDING THE OFFER, AS THEY
MAY BE AMENDED FROM TIME TO TIME, WHEN THEY BECOME AVAILABLE
BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. The tender offer
statement will be filed with the SEC by Clearwater Merger Sub,
Inc., a wholly owned subsidiary of Philips Holding USA Inc., which is a wholly owned subsidiary
of Royal Philips, and the
solicitation/recommendation statement will be filed with the SEC by
Volcano. Investors and security holders may obtain a free copy of
these statements (when available) and other documents filed with
the SEC at the website maintained by the SEC at www.sec.gov or by
directing such requests to the Information Agent for the Offer,
which will be named in the tender offer statement.
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/philips-to-acquire-volcano-to-expand-global-leadership-position-in-image-guided-therapy-market-300011004.html
SOURCE Volcano Corporation