Healthcare Industry News:  obstructive sleep apnea 

Devices Mergers & Acquisitions

 News Release - September 16, 2011

Natus Acquires Embla Systems LLC - Leading Sleep Diagnostic Company

Acquisition expected to add $0.08 to 2012 non-GAAP Earnings Per Share

SAN CARLOS, Calif.--(Healthcare Sales & Marketing Network)-- Natus Medical Incorporated (Nasdaq:BABY ) today announced that it has acquired Embla Systems LLC, a leader in the development, manufacturing, and sales of devices used in the diagnosis of sleep apnea. Embla is the largest company in the world focused solely on sleep diagnostics (Polysomnography or PSG and Home Sleep Testing). The company offers a wide spectrum of innovative sleep diagnostic solutions including Embletta home sleep testing devices and three leading PSG platforms: Sandman, REMbrandt, and RemLogic, and Enterprise Sleep Business Management Systems. This breadth of product offerings provides a unique set of tools to help optimize the efficiency of sleep labs.

Natus acquired all outstanding shares of Embla capital stock for $16.1 million in cash, exclusive of direct costs of the acquisition. Embla reported revenue of approximately $30 million for its fiscal year ended December 31, 2010.

Natus expects the acquisition will be accretive to earnings in 2012, adding $0.08 to non-GAAP earnings per share for the year. The non-GAAP results will exclude amortization of acquired intangible assets and potential restructuring and other one-time charges related to the acquisition.

“The Embla acquisition affirms our leadership position in diagnostic neurology products,” said Jim Hawkins, Chief Executive Officer of Natus. “With this acquisition, Natus will now hold the number one position in the worldwide sleep diagnostic market with annual revenue approaching $35 million.”

“Additionally, with approximately 40% of Embla’s revenue coming from international markets, this acquisition positions Natus as the leader in sleep diagnostics outside the United States,” added Hawkins. “More than 100 million people worldwide are suspected to have obstructive sleep apnea. Because of lack of awareness among both patients and physicians more than 80% of those affected remain undiagnosed.”

Natus funded the acquisition through available cash. The purchase price is subject to adjustment based on net working capital as of the purchase date.

Sleep Apnea

Sleep apnea is a sleep disorder characterized by abnormal pauses in breathing or instances of abnormally low breathing during sleep. There are three forms of sleep apnea: central (CSA), obstructive (OSA), and complex or mixed sleep apnea (i.e., a combination of central and obstructive) constituting 0.4%, 84% and 15% of cases respectively. Studies have shown that as many as one in every 15 Americans is affected by at least moderate sleep apnea. One study showed that in middle-age as many as 9% of women and 24% of men were affected, undiagnosed, and untreated. Conditions linked to obstructive sleep apnea include coronary artery disease, congestive heart failure, hypertension, pulmonary hypertension, stroke, and clinical depression, as well as other illnesses including asthma, chronic obstructive pulmonary disease, and diabetes mellitus.

About Embla

Embla Systems began development of medical devices for the detection of sleep apnea beginning in the mid 1990’s. The company has consistently developed innovative products to assist sleep labs in the diagnosis of the condition. In international markets the company is a leader in devices used for sleep studies performed in the patient’s home. With headquarters in Denver, Colorado, the company also has facilities near Buffalo, New York; Ottawa, Ontario, Canada; the Netherlands; and Germany.

Additional information about Embla can be found at

About Natus Medical

Natus is a leading provider of healthcare products used for the screening, detection, treatment, monitoring and tracking of common medical ailments in newborn care, hearing impairment, neurological dysfunction, epilepsy, sleep disorders, and balance and mobility disorders. 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, incubators to control the newborn's environment, and software systems for managing and tracking disorders and diseases for public health laboratories.

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 future revenue and contribution to earnings in 2012. These statements relate to current estimates and assumptions of our management as of the date of this press release. Future events or Natus' future financial performance or results 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, including the ability to successfully integrate and operate the Medix business, competitive factors in our markets, general economic conditions in our markets, and our ability to produce and ship products in a timely manner. 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, 2010, 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.

Additional information about Natus Medical can be found at

Source: Natus Medical

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