CareFusion (NYSE:CFN) gave up its neurodiagnostics unit to Natus Medical (NSDQ:BABY) for $58 million, the companies announced today.
Natus will pay cash for CareFusion’s Madison, Wisc.-based Nicolet business, which employs more than 400 worldwide and generated about $95 million in revenue in 2011, according to a press release.
"The Nicolet acquisition will strengthen our existing neurology portfolio and provide us with new product categories," Natus CEO Jim Hawkins said in prepared remarks. "Further, this acquisition will better position Natus in international markets, as over 50 percent of the CareFusion Nicolet business is in markets outside of the United States."
Nicolet develops neurodiagnostic and monitoring products, including electroencephalography (EEG) and electromyography (EMG) systems, vascular and obstetric sensors and related accessories.
"The decision to divest the Nicolet business is in line with our strategy to simplify and focus our operations and prioritize our investments to profitably grow over the long term," CareFusion chairman & CEO Kieran Gallahue said in prepared remarks. "We have a dedicated team in the Nicolet business that will have greater scale and access to broader market opportunities as part of Natus."
The Nicolet division recently notched an FDA win with a nod for its Viking on Nicolet electrodiagnostic system, a multi-modality device that monitors and tests the body’s electrophysiological functions.
Earlier this year CareFusion launched a Class I recall of components for its Nicolet cortical simulator. The company initiated the recall of 125 devices and 58 software licenses last October, after discovering the potential for short circuits.
The merger with should close in July 2012, and Natus plans to finance the acquisition with existing cash and borrowings under its revolving credit facility, according to a press release.
The news bode well for Natus, with BABY shares trading 2.8% higher to $11.04 as of about 11:45 a.m. today. CFN shares where down 2% to $25.38.