Royal Philips Electronics has signed a definitive agreement with Intermagnetics General Corporation under which Philips will acquire Intermagnetics for $27.50 per share or a total equity value of approximately $1.3 billion to be paid in cash upon completion. The Board of Directors of Intermagnetics has unanimously approved the proposed transaction. Completion of the transaction is subject to regulatory approval, to the terms and conditions of the merger agreement and to the approval of Intermagnetics’ shareholders.
The acquisition of Intermagnetics will allow Philips to rationalize its supply chain, to enhance its competitive position, and to participate in the fast growing market for RF coils. Philips anticipates the transaction to be accretive to its operating margin towards the end of 2007. There will be a one-time charge of approximately EUR 85 million related to in-process R&D expenses, integration of supply chain and various purchase accounting items, taken in the latter half of 2006. For the last four quarters ended February 26, 2006, Intermagnetics’ revenues were $304 million.
"Through this acquisition, we will greatly strengthen the overall performance and innovation capability of our MRI business,” Jouko Karvinen, member of the Philips Board of Management and CEO of medical systems. "In the short term, we expect to gain equipment market share and to grow the installed base by expanding our product offerings with an accelerated innovation rate and a lower cost supply chain. Intermagnetics’ leading positions in the high-growth and high-value markets of RF coils and MRI patient monitoring will enable us to build unique solutions for our customers," he added. “In the longer term, we believe that MRI technology will become important in molecular imaging, therefore positioning us well for the future."
Philips also recognizes the benefits offered by the breakthrough technology of SuperPower, Intermagnetics’ Energy Technology subsidiary, and will actively consider the most effective way to achieve its potential.