|Circadiance CEO David Groll|
Royal Philips ($PHG) has executed a flurry of partnerships and acquisitions in recent months as it works to refocus on HealthTech, which includes its healthcare and consumer businesses. But this time around, Philips is divesting products rather than adding them. It has sold its infant respiratory products, apnea monitor SmartMonitor and positive airway pressure device NeoPAP, to Circadiance for an undisclosed sum.
Circadiance was founded in 2007 by now-CEO David Groll, who worked in product development at Respironics well before its 2008 acquisition by Philips for $5 billion. The financial terms of the Philips-Circadiance deal were undisclosed; it is expected to close by the end of the week.
Circadiance already markets a line of CPAP masks made from soft cloth known as SleepWeaver. The Philips deal will enable the company to enter the pediatric market; the devices also target another market: home healthcare.
"Home infant cardiorespiratory monitoring is an established market dominated by SmartMonitor's proven technology which offers at-risk infants a smooth transition from hospital to home," said Groll in a statement. "NeoPAP represents the future of respiratory care in neonatal patients with respiratory distress syndrome. It's an exciting combination that we intend to leverage with future innovation."
Philips' healthcare business includes imaging systems, patient care and monitoring solutions and healthcare informatics. Last year, it had €1.7 billion ($1.88 billion) in respiratory care and sleep management revenues, up from €1.54 billion ($1.7 billion).
|Courtesy of Circadiance|
Despite the deal, the company identified sleep and respiratory care specifically as an area where it expected a convergence with consumer marketing could help boost sales under the HealthTech revision.
"We will leverage our consumer marketing capabilities to help our channel partners drive consumer demand in, for example, sleep and respiratory care," said Philips investor relations head Robin Jansen on a September call outlining the vision for HealthTech. "We see many synergetic opportunities as this HealthTech space evolves. This will be a business that will be growing mid to high single digit from a base of €100 billion and more to come."
- here is the release