Philips expands into US home cardiac monitoring market with acquisition
of Raytel Cardiac Services
4 October 2007
Royal Philips Electronics (NYSE:PHG, AEX:PHI) has announced that it is to
acquire US-based Raytel Cardiac Services (a division of Raytel Medical
Corporation) and other ancillary operations from SHL Telemedicine Ltd, for
approximately US$110 million in cash.
Raytel Cardiac Services is a leading US provider of home cardiac
monitoring services that doctors prescribe to heart patients. Cardiac
technicians based at monitoring centres analyze patient data and provide
real-time patient information to prescribing physicians.
Acquiring Raytel Cardiac Services represents a further step in Philips’
healthcare strategy of improving patient outcomes in specific care cycles,
such as cardiology. It complements recent acquisitions of Lifeline and
Health Watch. Philips has an 18% shareholding in SHL.
The acquisition is subject to regulatory approval and is expected to
close in the fourth quarter of 2007, upon which Raytel will become part of
Philips’ Home Healthcare Solutions business group. Raytel will also be
rebranded under the Philips name.
“Heart disease is the number one killer in the west. So Philips has
invested heavily over the years to become the top supplier to hospitals of
medical equipment for managing heart disease. Patients are living longer and
healthcare costs are rising, so we’re looking for innovative and effective
ways to support both patients and the healthcare system. Raytel can help us
extend the cardiac care cycle into the home, which is where patients prefer
to stay, and where we see opportunities for addressing healthcare costs as
well as quality of life issues,” said Ron Feinstein, CEO of Philips’ Home
Healthcare Solutions business group.
Erez Alroy, Co-CEO of Tel Aviv-based SHL, commented: “We are very excited
about the agreement with Philips. This is a major achievement for SHL,
strengthening our relations with our strong strategic partner with the
capacity and capability to significantly increase penetration of SHL
products in the North American market. In addition, the transaction will
provide SHL with significant cash resources to increase the pace of its
expansion in the German market as well as development of new markets and
The activities Philips is acquiring are expected to have 2007 sales of
approximately US$55 million. Philips aims to grow Raytel Cardiac Services by
capitalizing on its existing relationships with 15,000 referring physicians
and cardiologists who serve over 200,000 patients annually.
Philips aims to leverage these relationships for Philips Lifeline’s
products and services as well as for Philips’ in-house line of remote
patient monitoring products and services. New products and services based on
Philips’ and SHL’s products and solutions, such as congestive heart failure
(CHF) monitoring in the home are also expected to fuel growth.
already the leading provider of personal response services and emergency
call systems in the United States and Canada through Lifeline, which has
750,000 subscribers. These often suffer from a variety of chronic illnesses,
including CHF. Philips expects they too would benefit from the cardiac
monitoring service supported by trained cardiac technicians that Raytel
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