Azernews.Az

By Bloomberg

Royal Philips NV is working with Bank of America Corp. as it scouts for acquisitions in medical devices to expand its health-care division, according to people with knowledge of the matter.

While the process is preliminary and no specific targets have been identified, Philips would consider smaller acquisitions as well as multibillion-euro deals over the next six to 12 months, said the people, who asked not to be identified because the plans are private.

The budget for purchases may increase depending on other potential asset disposals, the people said. The company also could use the proceeds from an initial public offering or sale of its lighting division. Philips is reviewing options for that business, which it plans to sell as soon as next year.

Philips is eyeing medical-device companies in areas such as radiotherapy, imaging and home care both in the U.S. and in Europe, the people said. In December, Philips agreed to buy Volcano Corp. for $1.2 billion to expand in catheter-based imaging of the heart and blood vessels as part of a wider refocus on more profitable markets such as medical gear.

Bank of America’s Merrill Lynch unit will advise on everything from takeovers to strategy for the medical division while Philips is hiring different advisers for the separation of the lighting unit, the people said.

A spokesman for Amsterdam-based Philips declined to comment, as did a Bank of America spokeswoman.

On July 27, Philips reported surging demand at its North American medical business, bolstering Chief Executive Officer Frans van Houten’s plan to split the 124-year-old company in two to focus on health care. Van Houten is counting on demand for technology that allows hospitals to analyze clinical data and patients to monitor health and nutrition on smartphones.