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Philips enlists BofA to hunt for new buys in health care: Report

by Thomas Dworetzky, Contributing Reporter | August 11, 2015
Business Affairs Health IT Medical Devices Radiation Therapy
Royal Philips may be on the hunt for opportunities to build up its health care division.

Unnamed sources revealed to Bloomberg News that the recently restructured global giant is looking to acquire devices — and has turned to Bank of America for assistance in its hunt.

No specifics have been revealed so far, but the sources did note that smaller as well as larger firms will be getting considered during what was described as a six-to-12 month window.

One such possible target, Swedish firm Elekta AB, saw a rise in its stock valuations on rumors it might be a candidate for acquisition. “Elekta would be a really good fit for Philips and the two companies know each other well, as they already have a project in common,” Swedbank AB analyst Johan Unnerus told the news agency.

Besides Elekta, other medical device makers, such as Varian Medical Systems Inc., may also be candidates for purchase by Philips.

The Philips war chest for health care buys could grow significantly, especially if it sells or goes public with its lighting division, which insiders revealed is under consideration during the next 12 months.

As part of its emphasis on the health care sector, Philips entered into an agreement to purchase Volcano Corp. for $1.2 billion in December.

The sources told the news organization that BofA's Merrill Lynch unit would advise the medical division, and that Philips had also brought JPMorgan Chase & Co., Goldman Sachs Group and Rothschild.

All the named firms had no comment about the story.

Last month the company had noted that there was significant demand for its North American health care operations, justifying the earlier reported plan by CEO Frans van Houten’ to split the company in order to focus on health care.

In May the CEO noted, "We are convinced that separation is the right next step on the journey to set up Philips well for the future." He added, "We see professional health care and consumer markets converging into a single health continuum, enabled by connected health technology. With our combined Health Care and Consumer Lifestyle portfolios we will be able to capture opportunities from healthy living and prevention, to diagnosis, treatment, recovery and home care by addressing integrally the needs of consumers, patients and health care professionals."

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