Philips to Buy MRI Component Maker for $1.3B

Royal Philips Electronics announced today it will buy Intermagnetics General Corp., a maker of superconducting magnets used in magnetic resonance imaging (MRI) systems, for $27.50 per share or approximately $1.3 billion in cash.

The board of directors of Intermagnetics unanimously approved the transaction, which is still subject to regulatory approval and the approval of Intermagnetics' shareholders.

In addition to its high-field superconducting magnets, Intermagnetics provides specialized MRI-compatible patient monitoring devices and radio frequency (RF) coils that are mainly supplied to hospitals. For the last four quarters that ended Feb. 26, the company's revenues were $304 million.

Philips said Intermagnetics employs approximately 1150 people and its headquarters in Latham will become the global headquarters of Philips' enlarged magnetic resonance business. When the acquisition is completed, Intermagnetics Chairman and CEO Glenn H. Epstein will join Philips to lead the MRI business and its integration into the company under the direction of Steve Rusckowski, CEO of Philips Medical Imaging Systems.

Philips said it is also exploring its options regarding Intermagnetics' energy technology subsidiary, SuperPower.

"Through this acquisition, we will greatly strengthen the overall performance and innovation capability of our MRI business," said Jouko Karvinen, member of the Philips Board of Management and CEO of Medical Systems. In the short term, he said, Philips will gain market share and expand its product offerings more quickly and at a lower cost. "In the longer term, we believe that MRI technology will become important in molecular imaging, therefore positioning us well for the future."

Philips said the market for MRI, one of the key imaging technologies used in hospital radiology departments, was approximately $6.3 billion in 2005, and the number of MRI procedures have grown 10 percent a year since 1996. MRI is radiation-free, and is the preferred technique for high-resolution imaging of the brain, spine, abdomen, breast, prostate, blood vessels and of all joints in the body, Philips said.

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