Natus Medical Inc. 10.03.16
Natus Medical Incorporated is acquiring the GN Otometrics (Otometrics) business from GN Store Nord A/S in an all cash transaction for $145 million. With annual revenue of approximately $110 million, Otometrics is a manufacturer of hearing diagnostics and balance assessment equipment, disposables and software, currently being sold in more than 86 countries.
"Otometrics has several leading brands and has introduced many industry firsts," said Jim Hawkins, president and CEO of Natus. "With the addition of Otometrics, we anticipate Natus revenue in 2017 will reach $500 million, a major milestone for the company. We expect Otometrics to be accretive to our 2017 earnings with a non-GAAP contribution operating margin goal for the year of 10 percent and a 2018 goal of 20 percent."
Otometrics is a leader in the hearing and balance assessment market. Otometrics provides computer-based audiological, otoneurologic and vestibular instrumentation and sound rooms to hearing and balance care professionals worldwide. Otometrics has a complete product and brand portfolio known for its sophisticated design technology in the hearing and balance assessment markets. Global brands include Aurical, ICS and Madsen.
Natus also announced that it has entered into a $150 million revolving credit agreement with JP Morgan Chase and Citibank. Natus will use offshore cash and proceeds from this credit line to fund the acquisition.
The transaction is expected to close by the end of 2016.
Q3 Revenue Update
Natus updated its third quarter 2016 revenue guidance to $89 million to $91 million compared to previous guidance of $97 million to $98 million. A majority of the expected shortfall is due to a voluntary ship hold the company placed on certain products produced in its Seattle, Wash., facility. The remaining shortfall is primarily due to lower demand in the international markets. The ship hold is not related to any product safety issue. The ship hold is in place while the company remediates deficiencies in its engineering and manufacturing quality processes. The company expects to resume shipments of these products during the fourth quarter 2016 and the first quarter of 2017.
"We are committed to bringing our Seattle design and manufacturing systems up to required regulatory standards and we have placed a voluntary ship hold on certain products that are produced in Seattle," said Hawkins. "While we continue to take orders, we will not ship affected products until we have completed the remediation process."
Natus provides healthcare products and services used in the screening, detection, treatment, monitoring and tracking of common medical ailments in newborn care, hearing impairment, neurological dysfunction, epilepsy, sleep disorders, and balance and mobility disorders.
"Otometrics has several leading brands and has introduced many industry firsts," said Jim Hawkins, president and CEO of Natus. "With the addition of Otometrics, we anticipate Natus revenue in 2017 will reach $500 million, a major milestone for the company. We expect Otometrics to be accretive to our 2017 earnings with a non-GAAP contribution operating margin goal for the year of 10 percent and a 2018 goal of 20 percent."
Otometrics is a leader in the hearing and balance assessment market. Otometrics provides computer-based audiological, otoneurologic and vestibular instrumentation and sound rooms to hearing and balance care professionals worldwide. Otometrics has a complete product and brand portfolio known for its sophisticated design technology in the hearing and balance assessment markets. Global brands include Aurical, ICS and Madsen.
Natus also announced that it has entered into a $150 million revolving credit agreement with JP Morgan Chase and Citibank. Natus will use offshore cash and proceeds from this credit line to fund the acquisition.
The transaction is expected to close by the end of 2016.
Q3 Revenue Update
Natus updated its third quarter 2016 revenue guidance to $89 million to $91 million compared to previous guidance of $97 million to $98 million. A majority of the expected shortfall is due to a voluntary ship hold the company placed on certain products produced in its Seattle, Wash., facility. The remaining shortfall is primarily due to lower demand in the international markets. The ship hold is not related to any product safety issue. The ship hold is in place while the company remediates deficiencies in its engineering and manufacturing quality processes. The company expects to resume shipments of these products during the fourth quarter 2016 and the first quarter of 2017.
"We are committed to bringing our Seattle design and manufacturing systems up to required regulatory standards and we have placed a voluntary ship hold on certain products that are produced in Seattle," said Hawkins. "While we continue to take orders, we will not ship affected products until we have completed the remediation process."
Natus provides healthcare products and services used in the screening, detection, treatment, monitoring and tracking of common medical ailments in newborn care, hearing impairment, neurological dysfunction, epilepsy, sleep disorders, and balance and mobility disorders.