Philips Medical to Acquire Brazil's Leading X-Ray Manufacturer

Philips Medical Systems (Best, The Netherlands) and VMI-Sistemas Medicos (VMI; Minas Gerais, Brazil) announced Philips will acquire VMI, a Brazilian imaging diagnostic company.

The transaction is subject to regulatory approval, and is expected to close in the second quarter of 2007. No financial details on the transaction were disclosed.

"By acquiring VMI, Philips can offer customers in Brazil and across Latin America a more complete medical diagnostic imaging product portfolio. This is our first acquisition of a healthcare company in a developing economy, and it endorses the company's global strategy of focusing on healthcare and investing in emerging markets, looking for solutions especially developed to address local needs,” explained Steve Rusckowski, CEO of Philips Medical Systems.

Between 2003 and 2006, growth in the Brazilian market for medical diagnostic imaging and monitoring equipment has been robust, expanding at close to 20% per year, compared to annual growth rates in the global market of between 4 and 5%. In Brazil, Philips enjoys a prominent position in the market for most types of medical imaging equipment. Through this acquisition, Philips will become a leader in general x-ray in Brazil. Moreover, by capitalizing on VMI's extensive distribution network--also for economy range products--Philips believes this move will further promote growth.

"Through this deal, we can build on VMI's extensive sales and services channels in Brazil to further increase Philips' access to local customers and provide a benefit to hospitals through a wider product portfolio,” explained Daurio Speranzini, head of Philips Medical Systems in Latin America.

Since the first quarter of 2006, when Philips decided to start placing more emphasis on emerging markets and on systems specially designed to address local needs, this is its first acquisition in a growth economy--Latin America. It is also a result of the company's strategic orientation, which has been placing a stronger focus on the healthcare area. It will give Philips the opportunity of producing both analogic and digital x-ray equipment in Brazil, and as a result, offer more affordable systems to the local market.

Furthermore, the acquisition of VMI will help grow Philips' overall presence in Latin America further, since Philips plans to increase VMI's Brazilian exports to other countries in Latin America, which currently represent approximately 5% of VMI's business.

VMI-Sistemas Medicos markets analogic and digital x-ray systems as well as in the cath-lab, mammography, and ultrasound systems.


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