Last week Natus Medical completed its acquisition of Ontario, Canada-based Excel-Tech (Xltek). The deal expands Natus’ offerings in the neurology diagnostics marketplace and underscores the aggressive pace of growth seen at the company.
Jim Hawkins, President and CEO of Natus, stated, “[The acquisition] affirms our position as a market leader in neurology and brings Natus one step closer to achieving our stated goal of growing revenue to a $250 million annual run-rate by the end of 2008.”
Just two years ago Natus was primarily focused on newborn hearing diagnostics and had revenues totaling $43 million (for the year ended 2005).
If all goes to plan, the acquisition should be immediately accretive to earnings, excluding associated one-time charges. Natus will leverage its existing direct sales channels in the United States and Canada, and provide new distribution for Xltek products through the Natus international distribution organization, now operating in over 80 countries.
Xltek’s products include:
- diagnostics for peripheral nervous system dysfunction
- a high-end long-term EEG patient monitoring system for the diagnosis of epilepsy
- electromyography systems used in the diagnosis of neuropathies and myopathies
- intra-operative monitoring systems used during surgical procedures
Natus acquired all of the outstanding common shares of Xltek at a cash price of $3.25 (Canadian) per share. The transaction is valued at approximately USD$63.5 million.
Xltek reported revenue of C$32.5 million in the twelve months ended July 31, 2007 and cash and cash equivalents of C$16.4 million as of July 31, 2007. The company owns the land and building housing their corporate facility in Ontario.
In addition to available cash on hand, Natus financed $35 million of the purchase price through new senior term and revolving credit facilities with Wells Fargo.