Amsterdam, The Netherlands and Melbourne, Florida - Royal Philips Electronics (NYSE:PHG, AEX:PHI) and Witt Biomedical Corporation have announced that Philips will acquire Witt Biomedical Corporation, the largest independent supplier of hemodynamic monitoring and clinical reporting systems used in cardiology catheterization laboratories (Cath Labs). Subject to receipt of regulatory approval, Philips will acquire Witt Biomedical for approximately USD 165 million. The transaction is expected to close in the second quarter of 2006.

In hospital Cath Labs, heart patients undergo a catheterization procedure, in which a small tube or catheter is inserted in an artery in the arm or leg to reach the heart for diagnosis and treatment. With the growing digitization of hospitals, cardiologists are increasingly demanding that Cath Labs be fully integrated into a hospital's IT infrastructure. Hemodynamic monitors measure and monitor a patient's ECG (electrocardiogram), blood pressure and other vital signs associated with a Cath Lab procedure. Clinical reporting systems record and document the entire Cath Lab procedure.

Through this acquisition, both companies expect to benefit from being able to offer customers an integrated suite of best-in-class technologies for the Cath Lab department, leading to increased sales in cardiovascular x-ray, cardiology picture archiving and communication systems (PACS), and in hemodynamic monitoring and reporting systems. Based on company estimates, Philips in 2005 held the number one global position in cardiovascular x-ray and in cardiology PACS. In hemodynamic monitoring and clinical reporting systems, Witt Biomedical was the largest independent supplier in the United States in 2005, and was the number 2 supplier in the global market.
According to Witt Biomedical, the company's unaudited results for 2005 were sales of approximately USD 49 million - representing a growth in sales of 18% over 2004, and an operating margin of 30%. Philips expects the acquisition of Witt Biomedical to be margin accretive from 2008 onwards, with initial margin dilution due to purchase accounting treatment. Upon completion of the acquisition, Witt Biomedical will be integrated into the Cardiovascular X-ray business unit within Philips' Medical Systems Division.

"Through this latest acquisition, Philips is again partnering with a best-in-class company with an outstanding customer approval rating. Witt Biomedical is not only an exceptional company with an established track record in developing innovative solutions for the Cath Lab - it's also a leader in its field. In 2005, the vendor reviewer KLAS ranked Witt Biomedical number 1 in the Hemodynamics and Clinical Reporting market," said Jouko Karvinen, CEO of Philips Medical Systems. "By merging Witt Biomedical with Philips' successful number one position in the cardiovascular X-ray and cardiovascular PACS markets, we intend to obtain a leading position in the growing market for fully integrated Cath Labs," Mr. Karvinen added.

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