MANHASSET, N.Y. Royal Philips Electronics has
signed a definitive agreement to acquire Intermagnetics General Corp., a supplier of superconductive magnets for magnetic resonance imaging (MRI) systems, for $1.3 billion in cash.
The acquisition of Intermagnetics (Latham, N.Y.) is expected to strengthen Philips' position in magnetic resonance imaging as well as participate in the fast growing market for RF coils. Philips anticipates the transaction to be accretive to its operating margin
toward the end of 2007.
Philips is expected to incur a one-time charge of $107 million related to in-process R&D expenses, integration of supply chain and various purchase accounting items, taken in the latter half of 2006. For the last four quarters ended February 26, 2006, Intermagnetics' revenues were $304 million.
"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 a statement. "In the longer term, we believe that MRI technology will become important in molecular imaging, therefore, positioning us well for the future."
Philips has been trying to strengthen its medical electronics business. In March, Philips' research arm and U.K.-based Engineering and Physical Sciences Research Council (EPSRC) inked a $10.5 million, four-year agreement to fund biomedical research with an emphasis on battery-powered, wireless devices.