Philips to Acquire Sectra's Mammography Business

Philips Healthcare (Best, the Netherlands) has agreed to acquire Sectra Medical Systems mammography modality operations for EUR 57.5 million. The acquisition also includes an additional possible earn-out EUR 12.5 million in accordance with specially agreed terms and conditions.

Emphasizing the benefits of the transaction for both parties, Jan-Olof Brüer, president and CEO of Sectra Medical Systems (Linköping, Sweden) said, "Sectra will free up resources and funds that can be used to develop and expand our operations in medical imaging IT, in which we are among the major companies in the world for products for the management of digital radiology images. Philips will acquire a unique and competitive product and technology. The MicroDose modality operations and customers will benefit from the resources and knowledge that Philips, one of the world's leading suppliers of radiology equipment, will bring to the development of the product offering."

Sectra has developed and brought the MicroDose Mammography modality to the market. For the benefit of millions of women it provides high-quality breast cancer detection at half the radiation compared to all other mammography modalities, according to company spokespersons. "Our MicroDose technology will now save even more women lives, since it will be much faster spread around the globe through Philips' vast distribution network," added Jan-Olof Brüer.

The transaction comprises Sectra's mammography modality operations worldwide, except for Australia and New Zeeland where Sectra will continue to sell and service Sectra MicroDose Mammography under a separate distribution agreement with Philips.

Sectra Medical Systems' business group has about 530 employees and reported sales of SEK 831 million for the financial year 2010/2011.

Radiology IT, which is Medical Systems' largest product area, represented 85% of sales. "Through this transaction, we will gain a more distinct approach toward medical imaging IT, the area in which we have our core competence. We will continue to work with what we are best at: providing our customers with IT solutions that enhance the efficiency of medical care, optimize production, and contribute to improved quality of care," said Torbjörn Kronander, president of Sectra's Medical Systems business area.

The mammography modality operations include the legal entity Sectra Mamea AB and modality operations in Sectra's sales and service organizations. Approximately 110 employees are expected to be transferred with the business. Sectra Mamea sales for the past financial year amounted to SEK 127 million. The transaction is expected to have a positive impact on the Sectra Group's operating profit for the current financial year and the transaction, excluding the possible earn-out, is estimated to generate a capital gain of approximately SEK 300 million after tax. The transaction is expected to be completed in the third calendar quarter of 2011. Sectra Medical Systems will focus on continued profitable growth in medical imaging IT in which IT systems for the management of mammography images, Sectra Breast Imaging picture archiving and communication system (PACS), will remain one of the core areas.

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