PHG Koninklijke Philips NV

--Philips seeks to boost telehealth operations to capitalize on demand for remote care

--Dutch company will start a tender offer to buy BioTelemetry shares at $72 each

--Philips expects acquisition to boost sales growth and margin

By Adria Calatayud

Koninklijke Philips NV has agreed to buy U.S. remote medical-technology company BioTelemetry Inc., in a $2.47 billion deal that seeks to boost its telehealth operations to tap into growing demand for remote care on the back of the coronavirus pandemic.

The Dutch medical-technology company said Friday that Malvern, Pennsylvania-based BioTelemetry, a provider of remote cardiac diagnostics and monitoring, fits well in its strategy. Philips said its strength in patient monitoring in hospitals will be complemented by BioTelemetry's position outside hospitals.

Philips said telehealth services and remote monitoring are on the rise around the world, as the pandemic has accelerated adoption of these options as patients sought to stay away from hospitals.

"Covid has been an accelerator. The technology was already there, but doctors and patients liked coming in to hospitals for their care," Chief Executive Frans van Houten said in a call with reporters.

BioTelemetry President and CEO Joseph H. Capper said Philips' portfolio, innovation and global scale will allow it to address the rising demand for telehealth and remote-monitoring services.

While BioTelemetry focuses on the diagnosis and monitoring of heart rhythm disorders and predominantly operates in the U.S., Philips aims to eventually add other therapeutic areas and take its services to new markets, it said.

Philips said it will start a tender offer to acquire all of the issued and outstanding shares of BioTelemetry for $72.00 each, to be paid in cash upon completion. That price represents a 16.5% premium to BioTelemetry's closing price on Thursday, Philips said.

Philips said the deal implies an enterprise value for the target of $2.8 billion, including BioTelemetry's cash and debt.

The acquisition of BioTelemetry will result in significant synergies driven by cross-selling opportunities, geographical expansion, portfolio innovation synergies, and productivity gains, Philips said.

Since BioTelemetry has higher revenue growth rates and profit margins than the Dutch company, Philips said the deal will be accretive for its sales growth and adjusted earnings margin in 2021.

BioTelemetry said its board has approved the transaction and recommends the offer to its shareholders. The acquisition is expected to close in the first quarter of 2021, Philips said.

Shares in Philips at 0840 GMT were up EUR0.94, or 2.1%, at EUR44.97.

Write to Adria Calatayud at adria.calatayud@dowjones.com

(END) Dow Jones Newswires

December 18, 2020 04:26 ET (09:26 GMT)

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