Nihon Kohden to acquire DEFIBTECH (U.S. Company)

Nihon Kohden Corporation announced that it agreed with Defibtech, LLC (“Defibtech”), a U.S. manufacturer of resuscitation equipment, on October 26, 2012 (U.S. time), to acquire Defibtech through Nihon Kohden’s U.S. subsidiary.

 

Nihon Kohden has been marketing AED*1 devices since 2002 and has delivered approximately 200,000 units primarily in the Japanese market. The integration of the two companies will enable Nihon Kohden to become one of the leading global AED manufacturers with more than 360,000 units delivered throughout the world and to further strengthen Nihon Kohden’s business platform in the AED market. As the sole AED manufacturer in Japan, Nihon Kohden will endeavor to further improve the quality and functionality of its AED devices by integrating technologies from the two companies, which could further contribute to penetration of the AED market.

1. Purpose of the Acquisition

 

(1) Background to the Acquisition 
Nihon Kohden has been pursuing expansion of its overseas business under its long-term vision called “The CHANGE 2020 -The Global Leader of Medical Solutions-”. As the top manufacturer of defibrillators in Japan, the development of its defibrillator business, particularly in the U.S., the largest market in the world, has been a key objective for the company’s treatment equipment business unit, one of the company’s strategic business areas.
Defibtech is a leading manufacturer of resuscitation equipment in the U.S., with more than 160,000 AED devices delivered throughout the world. Defibtech has been steadily growing primarily in the PAD*2 market by taking advantage of its products’ sophisticated design, high functionality, high quality and price competitiveness. Moreover, Defibtech intends to expand its product lineup not only in the AED space, but also in other resuscitation product areas, and expects to continue its potential for strong growth.
Both Nihon Kohden and Defibtech reached an agreement on this strategic acquisition in order to realize value from: 1) integration Defibtech’s strong engineering capability in the resuscitation field with the core competence of Nihon Kohden in the fields of vital sign monitoring, and 2) expansion of market coverage by combining Defibtech’s presence in the U.S. market and Nihon Kohden’s global business platform.

 

(2) Significance of the Acquisition 
(a) Reinforcement of the Technological Capability in the Resuscitation Field Defibtech has used its strong engineering capability to design products with high quality and superior usability, which are key features in resuscitation equipment. Its AED devices are known for high-level functionality and quality in the industry. In addition to its AED products, Defibtech intends to expand its product lineup into other resuscitation markets, and will develop new lines of treatment equipment with high functionality, quality and price competitiveness.
Nihon Kohden has strong core capability in development of patient monitors and IT solutions in the emergency medical field, and also, as the top manufacturer of defibrillators in Japan, owns advanced technologies such as the Emergency Data Transmission System and AED Remote Monitoring System, with an advantage in the development of high quality and high-value added products that offer an entire care-cycle solution.
The integration of the technologies of both companies is expected to enhance engineering capability, accelerate the product development process, and further expand research and development capabilities for advanced treatment equipment in the resuscitation field.

 

(b)Expansion of Business in the U.S. Market
Expansion of its business platform in the U.S. market is one of Nihon Kohden’s strategic objectives. Nihon Kohden has developed its business presence in the U.S. market mainly through its Neurology and Patient Monitoring businesses. Through this strategic acquisition, Nihon Kohden will also expand its business platform and enter the resuscitation market in the U.S., the largest market in the world.
The U.S. market is also the center of pioneering research in resuscitation science and has a strong influence on the worldwide trends of resuscitation solutions. Establishment of a U.S. development base for resuscitation equipment with this strategic acquisition will enable Nihon Kohden to identify market trends in the early stage and will increase its opportunities for collaboration with leading research and development institutes. In the future, both companies aim to develop innovative medical equipment to further the advancement of resuscitation solutions in the marketplace.

 

2. Outline of the Acquisition

 

(1) Scheme of Acquisition
First, RESUSCITATION SOLUTION INC. (Registered head office: Delaware, U.S.A.; President: Toshitsugu Izawa), one of Nihon Kohden’s consolidated subsidiaries, will establish a special purpose company (“SPC”). Subsequently, Defibtech will become a wholly owned subsidiary of RESUSCITATION SOLUTION INC. by means of a cash merger with SPC (as the extinct company) and Defibtech (as the surviving company).

 

(2) Closing
November 30, 2012 (scheduled)

3. Defibtech’s Profile

4. Effect on Operating Results of Nihon Kohden

Possible effect of the Acquisition on the consolidated results for the fiscal year ending March 31, 2013 would be minor.

 

 

*1 AED: Automated External Defibrillator
*2 PAD (Public Access Defibrillation): Defibrillation using AED by the general public. The PAD market includes public facilities, schools and private companies.