CareFusion’s Vital Signs Purchase is Eighth in Three Years

CareFusion’s widely publicised acquisition of Vital Signs from GE healthcare will be the company’s eighth acquisition since 2010 and at $500 million looks a steal compared with what GE paid only five years ago.

Background

CareFusion has signed a definitive agreement that will see it acquire the Vital Signs division of GE Healthcare for $500 million. The acquisition for the Vital Signs business in the United States, China and certain other countries is expected to be finalised by the end of 2013 with the remainder of the transaction during quarter ending March 31, 2014, subject to regulatory review and customary closing conditions.

Vital Signs manufactures single-patient-use consumables for respiratory care and anesthesiology, as well as marketing products for temperature management and patient monitoring consumables. With annual sales of some $250 million there’s little doubt the Vital Signs business fits well with CareFusion, expanding the acquiror’s Specialty Disposables business by adding global scale and new products for anesthesiology, establishing the company as a leader in the more than $3 billion market for respiratory and anesthesia consumables.

As for GE Helathcare, having itself acquired Vital Signs only as recently as 2008 for a mere $860 million, it seems the concept of combining an anesthesia equipment-maker and single-use product company hasn’t worked out as well as they’d hoped. That the original acquisition was undertaken by previous Clinical Systems boss, Omar Ishrak, now ensconced at Medtronic, might also be a factor, regime change often having a bearing on strategic direction. It seems like GE Healthcare wants a return to its core business.

Company comments 

for CareFusion

“The acquisition of Vital Signs is well-aligned to our long-term growth strategy, helping us create scale in our Procedural Solutions call points and increase our presence outside of the United States,” said Kieran T. Gallahue, chairman and CEO of CareFusion. “Together, CareFusion and Vital Signs have the R&D, manufacturing and go-to-market resources to drive innovation, invest for growth and better support customers in major geographic markets.”

for GE healthcare

“We are confident this transaction will provide Vital Signs new capabilities to maximize its opportunities in the medical consumables space and enable GE Healthcare’s life care solutions segment to remain focused on its core strengths as a provider of medical device solutions,” GE Healthcare Systems president & CEO Tom Gentile said in prepared remarks. “We believe CareFusion is equipped to unlock the growth potential of Vital Signs with a solid focus and strategy around medical consumables.”

Source: CareFusion, Inc.

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