Philips to Acquire Emergency-Response Firm

In a move intended to improve its position in the expanding home-monitoring market, Philips Medical Systems (Best, The Netherlands) has agreed to buy Lifeline Systems (Framingham, MA, USA) for U.S.$750 million, or five times its 2005 sales.

Lifeline Systems provides emergency-response services for senior citizens and disabled people and has annual sales of $150 million. The deal is the biggest move yet by Philips to expand its consumer-health business. This latest purchase follows last year's acquisition of health-care technology company Stentor for $280 million.

Gerard Kleisterlee, chief executive of Philips Electronics (Amsterdam, Holland), sees higher-margin medical technology and health care as a key area for expansion, helping to make the Dutch company less dependent on volatile businesses such as semiconductors. The consumer-health division seeks to adapt technologies from the medical world and make them consumer friendly. One example is the company's home version of a defibrillator.



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