Natus Medical Inc. (BABY) Acquires Embla to Become Worldwide Leader in Sleep Apnea Diagnostics

Natus Medical, 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, recently announced the acquisition of Embla Systems, the largest company focused solely on sleep diagnostics. Since the mid-1990′s, Elma Systems has been developing innovative products to assist sleep labs in the diagnosis of sleep apnea, a sleep disorder that causes abnormally low breathing during sleep. Internationally, Embla is also the leader in devices used for sleep studies in patient’s homes. Embla reported earnings of approximately $30 million for its fiscal year that ended in December 2010.

Natus acquired the shares of Embla for $16.1 million in cash and expects the acquisition will be accretive to earnings in 2012, adding $0.08 to the non-GAAP earnings per share for the year. Natus funded the acquisition with available cash on hand. The company expects that the new company will make Natus number one 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,” said Jim Hawkins, Chief Executive Officer, Natus in a press release on Friday. “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.”

In the United States, one in every 15 American is affected by some form of sleep apnea. One study showed that 9% of women and 24% of men has undiagnosed and untreated sleep apnea, and thus were in jeopardy of having coronary artery disease, congestive heart failure, hypertension, pulmonary hypertension, stroke and clinical depression.

Embla partners with sleep businesses to provide sleep sensors and products like the Embletta Gold portable sleep testing device, the Enterprise Sleep Business Management System and three PSG or sleep study platforms which provide tools to optimize the efficiency of sleep labs. Embla has offices in Denver and Buffalo as well as worldwide in Canada, the Netherlands and Germany.

More Information on Natus, Medical can be found at www.natus.com

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