Philips EPD Buyout To Expand Image-Guided Therapy Portfolio

Koninklijke Philips (NYSE:PHG) is set to buy EPD solutions for €250 million (£219.57 million). The Dutch healthcare technology provider will also pay €210 million upon the achievement of certain milestones. The deal is expected to be completed in July.

The acquisition expands Philips’ Image-Guided Therapy portfolio. EPD’s cardiac imaging and navigation system helps electrophysiologists navigate the heart by generating a detailed 3D image of the cardiac anatomy. The system also aids in pinpointing the location and orientation of catheters during the diagnostic and therapeutic procedures for cardiac arrhythmias.

The technology simplifies navigation and treatment along with helping in assessment of the treatment results on a real-time basis, consequently improving procedure efficiencies. EPD’s solution for image-guided procedures received CE marking in February, this year. The premarket notification (510(k)) for the system is currently under review by the US FDA.

Philips Dominates Image-Guided Therapy Market on Buyouts

Philips is a dominant name in the Image Guided Therapy market thanks to its acquisition of Volcano in 2015, which helped the company become a leader in advanced catheters for diagnosis and therapy.

The company launched its Image Guided Therapy platform, Azurion, in early 2017. The company further expanded its portfolio through the $2.05 billion buyout of Spectranetics in June 2017.

Spectranetics was a well-known name in vascular intervention to treat coronary and peripheral artery disease. It was also a leading provider of electrophysiology (EP) device lead management for the minimally invasive removal of implanted pacemaker and implantable cardioverter defibrillator (ICD) leads.

The Spectranetics acquisition added laser atherectomy catheters, AngioSculptX scoring balloon and Stellarex drug-coated balloon to Philips portfolio.

The EPD takeover will further boost Philips’ position in the rapidly growing image guided treatment of cardiac arrhythmias (heart rhythm disorders), which is worth more than €2 billion and is improving at a double-digit rate.

In the last reported quarter, Diagnosis & Treatment revenues comparable sales grew 9%, driven by double-digit growth in Image-Guided Therapy platform. Moreover, its Azurion won significant traction. The company signed eight long-term strategic partnership agreements across the United States, Europe and the Middle East to Image-Guided Therapy solution.

Zacks Rank & Stocks to Consider

Currently, Philips carries a Zacks Rank #3 (Hold). Garmin (NASDAQ:GRMN) , Hoya Corp (OTC:HOCPY) and AMETEK (NYSE:AME) are stocks worth considering in the broader computer & technology sector. All the three stocks carry Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Long-term earnings growth rate for Garmin, Hoya and AMETEK is currently pegged at 8.35%, 10% and 10%, respectively.

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