Healthcare Industry News:  Polysomnography 

Devices Monitoring Acquisitions

 News Release - October 8, 2008

Natus Medical to Acquire Products from BrainZ Instruments Limited

SAN CARLOS, Calif.--(HSMN NewsFeed)--Natus Medical Incorporated (Nasdaq:BABY ) today announced that it has agreed to acquire certain assets from BrainZ Instruments Limited (ASX:BZI ). BrainZ, based in Auckland, New Zealand, develops and markets products for the bedside brain monitoring of neonates.

Under the purchase agreement, Natus will acquire essentially all the trading assets of BrainZ for a cash price of NZD $1.3 million (approximately USD $810,000), including the BRM2 and BRM3 monitoring devices, RecogniZe acquisition software, associated intellectual property, and branding. BrainZ has developed and marketed these products throughout the world beginning in 2001. Natus will also acquire accounts receivable and inventory, and assume accounts payable and certain other operating liabilities associated with the products, including obligations of BrainZ under various distribution and customer agreements, and obligations in respect of product warranties, product support, and maintenance obligations.

Directors of BrainZ have unanimously recommended the acquisition, which is subject to the approval of BrainZ shareholders. Natus expects to complete the acquisition in early November 2008.

Natus believes the acquisition will be accretive to earnings in the first full quarter of ownership, excluding associated one-time charges.

“This acquisition expands our product offering in the newborn brain injury market segment of our pediatric business. We are very excited about the opportunities in this developing field and we believe we can now accelerate the adoption of newborn brain monitoring as a standard of care in the NICU,” said Jim Hawkins, President and Chief Executive Officer of Natus. “We believe our worldwide sales and marketing channels will now be able to focus on this market segment in a more effective manner.”

“BrainZ has a history of strong product innovation, being the first company to develop and sell two- and three-channel brain monitors for neonates. These products will augment our Olympic CFM product, which is a single-channel bedside monitor. We believe this acquisition affirms our position as the market leader in newborn brain injury diagnosis and treatment,” Hawkins added.

2008 Guidance

As discussed in its September 3, 2008 press release announcing the acquisition of NeuroCom, Natus intends to update its revenue and earnings guidance for the fourth quarter and full year 2008 when it releases financial results for its third quarter ended September 30, 2008.

About BrainZ Instruments Ltd. and the BRM3 Monitor

BrainZ (ASX:BZI ) is a New Zealand based medical technology company specializing in the research, development, manufacturing and sale of bedside brain monitoring technology. The BRM2 brain monitor, BrainZ’s first product, is a unique bedside tool that assists in the detection of brain injury and seizure activity in neonates. It has been specifically designed to assist intensive care staff with clinical decision-making in conjunction with other clinical data and in the direction of care on a day-to-day basis.

The BRM2 monitor, and its successor, the BRM3, have received regulatory approval in the major markets. The monitors are in use in over 20 countries worldwide. BrainZ dominates the local Australian and New Zealand markets via direct sales channels. BRM monitors are also installed in over 40 leading US hospitals. BrainZ has secured an exclusive agreement with GE Healthcare, a leading supplier of patient monitoring systems, for the distribution of BRM brain monitors in the USA and UK markets.

The BRM3 is a continuous-use bedside brain monitor designed to detect changes and abnormalities in the neurological status of neonates. Its design is structured around the needs of busy NICU clinicians. Monitoring and trending neonatal cardiac function, respiratory function and thermoregulation has been standard practice for years. However, until recently, the one organ most at risk of injury, the brain, has not been routinely monitored. The BRM3 offers clinicians the ability to monitor brain function at the bedside, 24 hours per day, displaying both real time EEG activity and a time-compressed trend of EEG called amplitude integrated EEG (aEEG).

The BRM3 complements the use of clinical assessments and traditional neurodiagnostic tests such as multi-lead EEG, head ultrasound, CT and MRI. The long term trend of electrical activity provides clinicians with dynamic information to add to their ongoing clinical assessments. The BRM3 takes bedside patient monitoring and trending to the next level.

Additional information about BrainZ Instruments Ltd. can be found at

About Natus Medical Incorporated

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 within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding the acquisition being immediately accretive to Natus’ earnings and the potential for adoption of newborn brain monitoring as a standard of care in the NICU. These statements relate to future events and involve known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from those expressed or implied by the forward-looking statements. Actual results could differ materially due to a number of factors, including general political, economic and market conditions and events. 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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