Natus Medical to purchase Alpine Biomed Holdings

Sep 14 2009

Natus Medical Incorporated (Nasdaq:BABY) today announced that it has entered into an agreement to acquire Alpine Biomed Holdings Corp in a transaction that is expected to close today. Alpine Biomed, with corporate headquarters in Fountain Valley, California, is a leader in the development, manufacturing, and sales of devices for the diagnosis of neurological disorders. Alpine’s broad range of products includes advanced electromyography systems for the diagnoses of peripheral nervous system dysfunctions as well as devices for routine EEG and long term epilepsy monitoring. Water Street Healthcare Partners, a leading private equity firm focused exclusively on the healthcare industry, was the majority stockholder of Alpine Biomed.

Alpine Biomed has three neurology product divisions: diagnostic neurology devices under the Dantec brand, located in Copenhagen, Denmark; spike and seizure detection software applications and associated devices under the Stellate brand, located in Montreal, Canada; and neurology disposable products and accessories sold through the Alpine Biomed brand. These products are sold in the United States and in more than fifty countries around the globe.

Natus acquired all outstanding shares of Alpine Biomed capital stock for $43.2 million in cash, exclusive of direct costs of the acquisition. Alpine reported revenue of approximately $35 million in the twelve months ended June 30, 2009 through the neurology product divisions acquired by Natus; however, due to cross selling of Alpine and Natus products, Natus believes that third-party revenue was approximately $33 million during the period. Natus believes the acquisition will be accretive to earnings in the fourth quarter of 2009, exclusive of potential restructuring and other one-time charges.

“This acquisition affirms our position as the world-wide market leader in neurology,” said Jim Hawkins, President and Chief Executive Officer of Natus. “Approximately two-thirds of Alpine’s revenue is from outside the United States, and Alpine is the market leader in electromyography diagnostics, or EMG, in Europe with its well established Keypoint product line.”

“In addition, we believe this acquisition signals that our business model that combines internal growth and accretive acquisitions is back on track. We anticipate that in 2010 we will return to the revenue and earnings growth that we achieved prior to the worldwide economic slowdown that started in the fourth quarter of 2008,” said Hawkins.

“We plan to leverage our combined direct sales channels in the United States and Canada and provide new distribution for Stellate and Alpine products through the Natus international distribution organization, which operates in over 100 countries,” added Hawkins.

“It is a testament to our success in building Alpine Biomed into a leading provider of specialty diagnostic devices that Natus acquired our neurodiagnostic business,” said John Arnott, President and CEO of Alpine Biomed. “Together with Water Street, we created and executed a two-year strategic growth plan that has greatly enhanced Alpine Biomed’s products and the markets we serve. Alpine’s family of neurodiagnostic devices will benefit greatly from Natus’ industry leadership position.”

Natus funded the acquisition through available cash.

Financial Guidance

Natus intends to release its 2009 third quarter financial results on or about October 30, 2009, and will host a conference call the day of the release to discuss those results, the Alpine acquisition, and provide 2010 annual revenue and earnings guidance. 

 http://www.natus.com/