The wait is over. British technology conglomerate Marconi plc ended months of speculation today by announcing the sale of its Marconi Medical Systems unit to Royal Philips Electronics, the parent company of Dutch multimodality vendor Philips Medical Systems.
Philips has agreed to pay $1.1 billion in cash for Marconi. Philips will also purchase $150 million in Marconi communications equipment over the next five years as part of the deal.
Rumors first surfaced several months ago that Marconi was considering a sale of the Cleveland-based medical division. A U.K. newspaper in April pegged Philips and Siemens as among the possible suitors for the unit, with the division’s asking price reportedly $2.15 billion.
Marconi has an 85-year history in medical imaging, although it is best known under its previous corporate incarnation, Picker International. It abandoned the Picker name in 1999 as part of a corporate branding effort at Marconi.
Despite its tenure, Marconi was one of the smallest of the multimodality vendors. For the most part it did not participate in the recent frenzy of acquisitions that saw multimodality vendors like GE, Siemens, and Philips buy up most of the remaining single-modality imaging firms.
The Marconi deal is only the latest in a series of recent Philips acquisitions that have seen the company bulk up its imaging operations by buying ultrasound vendor ATL Ultrasound and nuclear medicine firm ADAC Laboratories. Philips also has a deal pending to buy Agilent’s medical business. The Marconi acquisition is expected to close in the fourth quarter and is contingent on customary regulatory approvals.
Philips will be gaining a division that participates in CT, MRI, nuclear medicine, and PACS. Marconi also maintains a strong multivendor service business, as well as its Healthcare Products supplies operation. Marconi Medical Systems recorded a profit of $155 million for its 2001 fiscal year (end-March), according to Marconi plc.
Ironically, the deal brings together two companies that first pondered a merger 14 years ago. Picker and Philips had planned to bring together their respective medical imaging divisions, but the deal ultimately fell apart.
By Brian Casey
AuntMinnie.com staff writer
July 4, 2001
Related Reading
Report claims Marconi is mulling sale of medical business, April 18, 2001
Picker to become Marconi as part of company makeover, November 28, 1999
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