Healthcare Industry News:  Polysomnography 

Devices Neurology Acquisitions

 News Release - July 2, 2008

Natus Medical Acquires Schwarzer GmbH Neurology Division

Expands Neurology Product Lines and Adds Growth Opportunities

Expected to be Accretive in 2008

SAN CARLOS, Calif.--(HSMN NewsFeed)--Natus Medical Incorporated (Nasdaq:BABY ) today announced that it has acquired the neurology business of privately held Schwarzer GmbH in a cash transaction. The neurology division of Schwarzer, based in Munich, Germany, develops and markets computer-based electrodiagnostic systems and disposable supplies used by medical practitioners to aid in the detection, diagnosis, and monitoring of neurologic disorders.

The acquisition was completed by way of an asset purchase under which Natus acquired the assets of the neurology division of Schwarzer including all shares in MMT Muenchner Medizintechnik GmbH, a subsidiary of Schwarzer GmbH engaged in the distribution of neurology products. Schwarzer Neurology expects revenue of approximately EUR 4.8 million for its fiscal year ended June 30, 2008. In addition to the purchase price paid at closing, which was less than one times trailing twelve month revenue, an earnout provision of the purchase agreement could result in additional cash consideration to Schwarzer GmbH based on the future performance of the Schwarzer Neurology division. Other terms of the transaction were not disclosed.

Jim Hawkins, President and Chief Executive Officer of Natus commented, “With this acquisition, we believe we now have a market leading position for diagnostic neurology systems in the German-speaking regions of Europe. Schwarzer Neurology adds to our growth opportunities by broadening our product offerings in the EEG market and allows us to further leverage our international distribution organization, bringing Natus another step closer to achieving our stated goal of growing revenue to a $250 million annual run rate by the end of 2008.”

“The Schwarzer Neurology division has a very loyal customer base in the German diagnostic neurology market segment. We plan to combine their direct sales organization with our existing organization in Germany to sell both the Schwarzer Neurology products and our IT-Med neurology products,” added Hawkins. “We also expect to develop new distribution opportunities for Schwarzer Neurology products through our existing international distribution organization, now operating in over 80 countries.”

Natus expects the acquisition to be accretive to earnings during 2008, excluding any one time acquisition related charges. Natus will update its financial guidance for the full year 2008 when it releases its financial results for the second quarter of 2008, to give effect to the acquisition of Schwarzer Neurology.

About Natus Medical

Natus is a leading provider of healthcare products used for the screening, detection, treatment, monitoring and tracking of common medical ailments such as hearing impairment, neurological dysfunction, epilepsy, sleep disorders, and newborn care. Product offerings include computerized neurodiagnostic systems for audiology, neurology, Polysomnography, and neonatology, as well as newborn care products such as hearing screening systems, phototherapy devices for the treatment of newborn jaundice, head-cooling products for the treatment of brain injury in newborns, and software systems for managing and tracking disorders and diseases for public health laboratories.

Additional information about Natus Medical can be found at

This press release contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995, particularly statements regarding the expectations, beliefs, plans, intentions and strategies of Natus. These forward-looking statements include, but are not limited to, statements regarding the benefits of the acquisition of the Schwarzer Neurology assets by Natus, including the expected accretive impact of the acquisition on the earnings of Natus and the alignment of the acquisition with the Company’s business model, as well as the Company’s goal of achieving a $250 million annual run rate of revenue by the end of 2008. These statements relate to future events or Natus' future financial performance or results, and involve known and unknown risks, uncertainties and other factors that may cause actual results, levels of activity, performance, or achievements to differ materially from those expressed or implied by the forward-looking statements. Forward-looking statements are only predictions and the actual events or results may differ materially. Natus cannot provide any assurance that its future results or the results implied by the forward-looking statements will meet expectations. Our future results could differ materially due to a number of factors, including the effects of competition, the demand for our products and services, our ability to expand our sales in international markets, our ability to maintain current sales levels in a mature domestic market, our ability to control costs, and risks associated with bringing new products to market and integrating acquired businesses. Natus disclaims any obligation to update information contained in any forward-looking statement.

More information about potential risk factors that could affect the business and financial results of Natus is included in Natus' annual report on Form 10-K for the year ended December 31, 2007, and its quarterly reports on Form 10-Q, and in other reports filed from time to time by Natus with the U.S. Securities and Exchange Commission.

Source: Natus Medical

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