Philips bets big on connected care with recent acquisitions (2024)

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Health tech giant Royal Philips has entered into a definitive agreement to acquire remote cardiac care company BioTelemetry for $2.8bn and announced plans to purchase Capsule Technologies for a cash consideration of $635m. Remote care platforms and the technologies that enable them are increasingly in demand, but what do these deals signal for medtech?

Chloe Kent January 27, 2021

Philips bets big on connected care with recent acquisitions (1)

After weeks of negotiation, in mid-December 2020 Royal Philips entered into an agreement to acquire remote cardiac diagnostic and monitoring company BioTelemetry for a stock deal valued at $2.8bn.

BioTelemetry remotely monitors more than one million cardiac patients annually and boasts wearable heart monitors and artificial intelligence (AI)-based data analytics within its portfolio.

Philips will pay BioTelemetry shareholders $72 per share, representing a 16.5% premium on BioTelemetry’s closing price of $61.76 per share as of 17 December 2020. Following the news of the agreement, the company’s stock value rose to $72.22 on 18 December.

Upon completion of the transaction, BioTelemetry and its workforce of approximately 1,900 employees will become part of Philips’s Connected Care enterprise, which specialises in patient monitoring solutions.

The sale, which is expected to complete during Q1 2021, has been described by Philips as a “strong fit” with the rest of Philips’ cardiac portfolio by the company.

A Philips spokesperson told Medical Device Network: “The acquisition of BioTelemetry will add to [Philips’ portfolio of] leading cardiac diagnostics and monitoring solutions, comprised of wearable connected heart monitors, AI-based data analytics and services. These clinically validated solutions are focused on the diagnosis and monitoring of heart rhythm disorders.

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Philips bets big on connected care with recent acquisitions (4)

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“BioTelemetry provides services for over one million patients per year and has built the world’s largest remote cardiac monitoring services network. Acquiring BioTelemetry will further broaden and scale our patient care management solutions for the hospital and the home to enhance patient outcomes, streamline clinical workflows and increase productivity.”

Expanding the connected care enterprise

Alongside its purchase of BioTelemetry, Philips announced on 19 January that it had signed an agreement to acquire Capsule Technologies, a medical device integration company.

Capsule’s Medical Device Information Platform is comprised of device integration, vital signs monitoring and clinical surveillance services. It connects almost all existing medical devices and electronic medical records (EMRs) in hospitals through a vendor-neutral system, streaming clinical data and transforming it into actionable information for patient care management teams.

This transaction is likewise expected to complete in Q1 2021 and will see Capsule’s approximately 300 employees become part of Philips Connected Care.

While not explicitly a remote care solution, Capsule’s platform can be used to enrich patient care management solutions both in a hospital and remotely by aggregating clinical data from numerous connected devices in one place.

In a statement, Royal Philips chief business leader of connected care Roy Jakobs said: “The acquisition of Capsule will further expand our patient care management offering. 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.”

Strong outlook for telehealth post-pandemic

Philips reported 7% comparable Q4 sales growth this week, with the €6bn revenue secured by the company beating analyst estimates by around €40m. The company’s diagnostics and treatment, personal health and connected care departments all outperformed expectations, but connected care stood out with 24% year-on-year comparable growth in sales.

Philips has attributed this growth to the increased demand for remote healthcare products as a result of the Covid-19 pandemic, but stressed that this is far from a new area of business for the company.

“Connected care and remote monitoring outside the hospital have been part of Philips’ strategy for many years,” says a Philips spokesperson. “We have supported care providers with our secure, connected and AI-enabled solutions for monitoring in the hospital, plus screening, remote patient monitoring and care at home. This has been accelerated by Covid-19, but it is not new to Philips.”

Telehealth has boomed in the wake of the Covid-19 pandemic and is expected to keep growing at a compound annual growth rate (CAGR) of 18.9% from 2019 to 2026, according to ResearchAndMarkets.com.

However, Philips expects the increased demand for its connected care portfolio to abate somewhat over 2021 as the Covid-19 crisis lessens. While the pandemic is far from over, worldwide rollouts of numerous highly effective vaccine candidates have led many in the industry to anticipate waning remote care demand over the course of the coming year.

Despite the expected downturn for telehealth, the pandemic has cemented remote healthcare pathways as viable options even when it’s safe to see patients face-to-face. A medtech giant such as Philips continuing to confidently invest in connected care sends a signal that this is an area of the sector that will continue to thrive even after the pandemic boom ends.

Technologies and services such as those offered by BioTelemetry and Capsule have gone from new-fangled luxuries to de rigueur for many healthcare providers in 2020 and are likely to remain popular even after Covid-19 restrictions are lifted due to the many benefits they offer patients and practitioners at the system level.

Philips bets big on connected care with recent acquisitions (2024)

FAQs

Philips bets big on connected care with recent acquisitions? ›

Health tech giant Royal Philips has entered into a definitive agreement to acquire remote cardiac care company BioTelemetry for $2.8bn and announced plans to purchase Capsule Technologies for a cash consideration of $635m.

Why is Philips stock dropping? ›

Philips faces an order intake squeeze, and orders have fallen for a successive six quarters. For the first quarter of 2024 they were down -3.8%, the seventh consecutive quarter of decline. Chief executive Roy Jakobs says China is to blame.

What is the slogan of Philips? ›

Together, we make life better | Philips.

What happened to the Philips brand? ›

So, does the Philips company still exist? Yes, but as you'll see in this video, Philips stock is falling day by day and the company, once credited with sparking the semiconductor revolution, went through decades of mismanagement that left it a pale shadow of its former self.

What is the controversy with Phillips company? ›

Lawsuits against the company contend that Philips designed its CPAP machine poorly and put it on the market without appropriate warnings. The FDA accuses Philips of not taking appropriate action about the dangers of the degrading foam in its CPAP and ventilator devices despite learning about the risk as early as 2015.

Is Philips a good company to invest in? ›

Headquartered in Amsterdam, The Netherlands, Koninklijke Philips N.V. is the parent company of the Philips Group. PHG is a Zacks Rank #2 (Buy) stock, with a Value Style Score of A and VGM Score of A.

What is Philips best known for? ›

Philips, major Dutch manufacturer of consumer electronics, electronic components, medical imaging equipment, household appliances, lighting equipment, and computer and telecommunications equipment.

What makes Philips unique? ›

We have a proud heritage of ground-breaking innovation that stretches back over 130 years. Meaningful innovation – focused on our customers' needs – remains at the heart of everything we do. Yet in an industry as fast-moving as ours, we can rarely innovate in isolation.

What is Philips new name? ›

Philips Lighting announces intention to change company name to Signify while keeping the Philips brand for its products. Philips Lighting today announced its intention to change its name from Philips Lighting to Signify.

Who is the parent company of Philips? ›

Koninklijke Philips N.V. ( lit. 'Royal Philips'), commonly shortened to Philips, is a Dutch multinational conglomerate corporation that was founded in Eindhoven in 1891. Since 1997, its world headquarters have been situated in Amsterdam, though the Benelux headquarters is still in Eindhoven.

Why doesn t Philips sell TVs in the US? ›

“For some brands,” he says, “the TV business here in the States was not profitable anymore.” Companies including JVC, Magnavox/Philips, and Toshiba exited the U.S. market, licensing or selling their brands to companies in China, Taiwan, and elsewhere looking to break into the U.S. market.

Is Philips still a good brand? ›

Philips consistently ranks highly in many of the world's leading 'top company' assessments for its Environmental, Social and Governance (ESG) performance, its action on climate change and the circular economy, and its employee satisfaction ratings.

What does Philips Healthcare do? ›

At Philips, we look beyond technology to the experiences of consumers, patients, providers and caregivers across the health continuum – from healthy living and prevention to diagnosis, treatment and home care. We unlock insights leading to innovative solutions that enable better care at lower cost.

Are Philips products made in China? ›

China is already a big center of export for Philips and currently manufactures 70 percent of the company's audio products. China makes up 20 percent of total global production for Philips; Philips has 27 percent annual growth in China for exports compared with an industry average of 24 percent.

Why is Philips falling? ›

Philips Stock Falls Nearly 5% After FDA Issues Safety Warning About Its Sleep Apnea Machines.

Why is Phillips 66 stock dropping? ›

April 26 (Reuters) - Oil refiner Phillips 66 (PSX. N) , opens new tab reported a first-quarter earnings miss on Friday, as seasonal maintenance and a renewable fuels conversion project at its Rodeo, California, refinery weighed on profits.

What is the forecast for Philips stock? ›

The 3 analysts offering 12 month price targets for Koninklijke Philips NV (ADR) have a median target of 21.47, with a high estimate of 28.09 and a low estimate of 18.76. The median estimate represents a -14.79% decrease from the last price of 25.20.

Is Phillips 66 a good stock to buy right now? ›

Phillips 66 Common Stock's analyst rating consensus is a Moderate Buy. This is based on the ratings of 14 Wall Streets Analysts.

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