Natus Medical to acquire leading French EEG manufacturer Deltamed

San Carlos, Calif. USA. Natus Medical Incorporated (Nasdaq:BABY) has announced that it is to acquire privately held French EEG manufacturer Deltamed SA, headquartered in Paris and its wholly owned subsidiary, IT-Med, located near Frankfurt, Germany. The transaction is expected to close mid September.

Deltamed is a leading European manufacturer of medical devices used in the detection of neurological dysfunction, epilepsy, and sleep disorders through the use of electroencephalograph (EEG) and polysomnography (PSG) technologies. The acquisition adds to Natus' international growth opportunities by broadening its product offerings and leveraging its distribution organization. Natus believes the acquisition will be accretive to earnings in the fourth quarter of 2006.

Natus has agreed to acquire Deltamed for EUR 3.1 million or approximately U.S. $4.0 million. Under terms of the acquisition, Natus will retain Deltamed's operations as well as its direct sales channels in France and Germany. Deltamed founder Robert LeGuen will continue as Managing Director of the organization. Deltamed currently has 37 employees, recorded revenue of EUR 4.3 million in calendar 2005 or approximately $5.3 million, and has sold more than 2,000 EEG & PSG devices since its inception.

"We believe Deltamed's complementary products and distribution will fill a need in our EEG & PSG product portfolio internationally and give Natus a stronger European presence," said Jim Hawkins, President and Chief Executive Officer of Natus. "Deltamed has successfully developed a direct sales force in France and Germany, where they are a market leader in EEG sales and are recognized for producing high-quality products. We believe Natus can leverage this position by bringing Deltamed products into new markets through our established international distribution channel."

"We are excited to be joining Natus, a company that shares our passion for quality, innovation and market leadership," commented Mr. LeGuen.

Any one-time charges associated with the acquisition were not included in the financial guidance previously provided by the Company.

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