CareFusion closes $500m acquisition of Vital Signs from GE Healthcare

3 January 2014 (Last Updated January 3rd, 2014 05:30)

CareFusion has completed the acquisition of the Vital Signs division from GE Healthcare in the US, China and other specific areas.

CareFusion has completed the acquisition of the Vital Signs division from GE Healthcare in the US, China and other specific areas.

In November 2013, the company signed a definitive agreement with GE Healthcare as part of its strategic plans to expand its respiratory care and anaesthesiology businesses to purchase Vital Signs for $500m.

In connection with this first closing, CareFusion paid GE Healthcare approximately $470m in cash.

The remaining $30m will be paid upon completion of the acquisition of the remaining international operations of Vital Signs, subject to regulatory review and customary closing conditions.

This acquisition is reportedly the eighth acquisition by CareFusion since 2010.

"We are in a better position to serve customers in this large, global and growing market with a broader product portfolio and complementary expertise in respiratory and anesthesia care."

Vital Signs is a manufacturer of single-patient-use consumables for respiratory care and anaesthesiology. It has an annual revenue of approximately $250m. The company also markets products for temperature management and patient monitoring consumables.

CareFusion chairman and CEO Kieran Gallahue said the acquisition of Vital Signs doubles the size of company's specialty disposables business.

"We are in a better position to serve customers in this large, global and growing market with a broader product portfolio and complementary expertise in respiratory and anesthesia care," Gallahue said.

With approximately one-third of its revenue coming from customers outside the US, CareFusion sees opportunities to improve top and bottom-line results by increasing international product sales through Vital Signs' complementary infrastructure outside the US and by leveraging CareFusion's operational infrastructure.

With the addition of the Vital Signs portfolio, CareFusion will now become a full-line provider of more than 20,000 single-use consumables for respiratory care and anaesthesiology, including circuits for oxygen and anaesthesia, humidification, masks, filters, pressure infusers and temperature management products.

According to GlobalData estimates, the US vital sign monitors market was valued at $180m in 2012 and is expected to grow at a CAGR of 2.8% to reach $218m by 2019.