Mindray to Acquire Datascope's Patient Monitoring Business, Gaining Strong US and European Base

has agreed to acquire Datascope's patient monitoring business for US$202 Million.

Mindray expects to benefit from synergies created by combining its significant China-based R&D and production resources with Datascope's established brands as well as extensive direct sales and service network in the US and Europe.

Datascope's patient monitoring business achieved total revenues of US$161.3 million in calendar year 2007, approximately the same revenues generated from Mindray's home China market. Currently, the majority of Datascope's patient monitoring revenue is generated from sales in North America, with the remainder from markets largely in Europe.

The acquisition price consists of $202 million in cash; funded through Mindray's internal cash flow, and planned third-party borrowings. Datascope will retain approximately $38 million of receivables generated by its patient monitoring unit. The transaction has been approved by both Datascope and Mindray boards of directors and is expected to close, subject to regulatory and other customary conditions, in the second quarter of 2008.

This transaction represents a unique combination of strengths that will help transform Mindray from a largely China-based company into a global leader, and substantially further our strategy of building a leading on-the-ground presence in the US and Europe, said Xu Hang, Mindray's chairman and co-chief executive officer. Datascope customers should also benefit from the combined company's expanded product lineup and enhanced ability to tailor product functionality for specific end-user requirements, and Mindray's customers in the US and Europe will enjoy the support of an established direct sales and service network.

Mindray plans to maintain Datascope's existing branded product lines and to continue manufacturing Datascope products in the US. David Gibson, Datascope's vice president and president, patient monitoring division & technology services division, will serve as president of Mindray's Datascope patient monitoring business unit upon completion of the transaction. The existing management team is expected to continue post-closing without significant changes along with the rest of the patient monitoring division staff.

Li Xiting, Mindray's president and co-chief executive officer commented, This is an exceptional fit of complementary assets in the patient monitoring industry. Datascope's strength in direct sales to under-300 bed hospitals, its leading market share in key niche areas, and direct sales and service team in the US and Europe offer immediate cross-selling opportunities for Mindray's high performance-to-price medical imaging systems. Also, by leveraging Mindray's China-based R&D, we are positioned to tailor existing Datascope models for new markets and enhance product functionality. With our common culture of performance and dedication to meeting customer needs, I am very optimistic for the future of the combined business.

Mr. Li noted that the combined company would enjoy leading market share in specific sub-segments of the US patient monitoring market, such as ambulatory surgery centers, the hospital anesthesia market and the vital signs monitoring market, as well as significant strength in centralized monitoring systems.

Upon completion of the transaction, the combined business will offer over 50 products across Mindray's three product segments. Mindray will benefit from Datascope's patient monitoring product pipeline as well as its existing wireless monitoring solution, NetGuard, for detecting unexpected cardiac events in previously unmonitored patients, which recently received FDA approval. The combined business will benefit from manufacturing synergies derived from Mindray's China-based component sourcing and will have approximately 4,100 employees.

Established in 1991, Mindray Medical International Ltd. (Shenzhen, China) produces medical devices in three main areas: patient monitoring and life support; in-vitro diagnostics; and medical imaging. The company has 29 sales and service offices in China, as well as 11 such centers around the world. Mindray became a New York Stock Exchange (NYSE) listed company as a result of an initial public offering (IPO) that took place in September 2006.

Founded in 1964, Datascope Corp. (Montvale, NJ, USA) is a global leader in intra-aortic balloon counterpulsation and a diversified medical device company that produces devices in the areas of interventional cardiology and radiology, cardiovascular and vascular surgery, anesthesiology, emergency medicine and critical care.


Related Links:
Datascope
Mindray