Philips to Acquire Volcano

December 17, 2014—Royal Philips and Volcano Corporation announced that they have entered into a definitive merger agreement. Pursuant to the agreement, Philips will commence a tender offer to acquire all of the issued and outstanding shares of Volcano for $18.00 per share, or a total equity purchase price of $1 billion (approximately €800 million), to be paid in cash upon completion.

The board of directors of Volcano has unanimously approved the transaction and recommends the offer to its shareholders. The transaction is expected to close in the first quarter of 2015.

Philips, which is headquartered in Amsterdam, The Netherlands, posted 2013 sales of €23.3 billion and employs approximately 115,000 employees, with sales and services in more than 100 countries. Volcano, which is based in San, Diego, California, had sales of approximately $400 million in 2013.

Upon completion of the transaction, the Volcano business and its 1,800 employees will be part of a dedicated, new image-guided therapy business group within Philips that will be led by Philips executive Bert van Meurs.

According to the press release, in recent years Philips has created its image-guided therapy business through strategic investments in research and development, partnerships, and technology licenses. Additionally, Philips has a portfolio of interventional imaging equipment, navigation tools, and services.

Volcano focuses on catheter-based imaging and measurement technology for minimally invasive diagnostics and treatment of coronary artery disease and peripheral vascular disease. Volcano’s technology includes both intravascular ultrasound imaging and fractional flow reserve measurement devices. In addition, Volcano is developing a peripheral vascular therapeutics business.

Pursuant to the merger agreement, the transaction is subject to customary closing conditions, including certain regulatory clearances in the United States and in certain non-United States jurisdictions. The tender offer is not subject to any financing conditions. Philips intends to finance the acquisition through a combination of cash on hand and the issuance of debt, according to the announcement.