- Philips announced Tuesday plans to acquire Capsule Technologies for a cash consideration of $635 million, marking the company's second deal in roughly one month. The Dutch conglomerate expects the acquisition to be completed in the first quarter of 2021.
- Capsule's medical device information platform connects "almost all existing" medical devices and electronic health records in hospitals through a vendor-neutral system that gathers and analyzes patient data, according to the announcement. The company grew sales by double digits in 2020 and brought in $100 million, with the majority of revenue coming from software-as-a-service and licensing deals.
- In December, Philips announced a $2.8 billion purchase of cardiac monitoring company BioTelemetry, one of the largest deals of last year. The medtech giant's stock was up less than 1% in late Tuesday morning trading.
The year has opened with a flurry of medtech M&A. Along with the two deals from Philips, Hologic and Stryker announced tuck-ins during the first week of the year, PerkinElmer announced a $591 million acquisition of Oxford Immunotec, and Steris said it plans to acquire Cantel Medical for $4.6 billion. Thermo Fisher also announced on Tuesday a $450 million acquisition of point-of-care molecular diagnostics provider Mesa Biotech.
After a slowdown in dealmaking last year due to the coronavirus pandemic, EY consultants expect a jump in activity in 2021. The industry has a record roughly $500 billion in financial firepower and should be looking to leverage it in both tuck-ins and larger deals, according to the consultancy.
While Capsule operates primarily in the provider space, working with about 2,800 hospitals and healthcare organizations, Philips said that the acquisition will continue its efforts to move beyond healthcare facilities by complementing its real-time patient monitoring and remote care offerings.
"We look forward to integrating our strengths, adding a vendor-neutral medical device integration platform that further unlocks the power of medical device data to enhance patient monitoring and management, improve collaboration and streamline workflows in the ICU, as well as other care settings in the hospital and beyond its walls,” Roy Jakobs, Philips' chief business leader of connected care, said in a statement.
Philips has capitalized on the recent rise in virtual care with the BioTelemetry acquisition, which the company said increases its remote patient monitoring offerings and expands services out of the hospital and into patients' homes.
The two recent deals follow comments from CEO Frans van Houten in October highlighting remote monitoring's recent growth and potential after the pandemic.
"We also expect to see monitoring to take off in the out of hospital space, with more and more chronic patients being monitored on a continuous basis or at least certainly after discharge for a while," van Houten said during a third-quarter earnings call. "These are new monitoring markets that will kick in also post COVID. And therefore, we expect to be very positive about the monitoring and analytics marketplace for the years to come."