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Philips and Masimo enter into multi-year business partnership agreement for patient monitoring and select therapy solutions.

M2 EQUITYBITES-November 8, 2016-Philips and Masimo enter into multi-year business partnership agreement for patient monitoring and select therapy solutions

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Royal Philips (NYSE:PHG) (AEX: PHIA) and Masimo Corporation (Nasdaq: MASI), a provider of innovative non-invasive monitoring technologies, on Monday announced a wide-ranging, multi-year business partnership involving both companies' innovations in patient monitoring and therapy solutions.

This partnership includes joint marketing and sales programmes in North America and certain markets in Asia and Europe for Masimo's non-invasive sensor technologies, such as its rainbow and SET platforms, in conjunction with Philips' patient monitoring and select therapy solutions.

Also, Philips will in the future integrate Masimo SedLine brain function monitoring, O3 regional oximetry and Nomoline capnography technologies in certain Philips IntelliVue monitors.

In addition, as a part of the business partnership agreement, Philips and Masimo have agreed to end all pending lawsuits between the two companies, which includes that Philips is released from paying the USD467m jury verdict that was awarded to Masimo in October 2014. Philips has agreed to make a USD300m cash payment to Masimo in the fourth quarter of 2016 and to invest in the relationship by making certain marketing and product integration commitments over the coming years.

Reportedly, entering into this business partnership agreement has minimal impact on income from operations (EBIT) in the fourth quarter of 2016.

As the result of anticipated legal fee savings during Q4 fiscal quarter, Masimo now expects its fiscal 2016 GAAP earnings per diluted share, exclusive of the impact of the business partnership agreement, to be USD2.14, up from USD2.13. Masimo expects to use some of the after-tax proceeds from the business partnership agreement to repay amounts outstanding under its revolving line of credit. The guidance set forth above is an estimate only and actual performance could differ.

Royal Philips is a health technology company that leverages advanced technology and deep clinical and consumer insights to deliver integrated solutions. It is a provider of diagnostic imaging, image-guided therapy, patient monitoring and health informatics, as well as in consumer health and home care.

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Publication:M2 EquityBites (EQB)
Date:Nov 8, 2016
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