Philips To Buy Atl For $800 Million -- No Move, Layoffs Planned For Bothell Ultrasound Firm

Bothell-based ATL Ultrasound, a leader in high-end ultrasound equipment for 29 years, said today that it agreed to be acquired by Amsterdam-based Royal Philips Electronics for $800 million in cash.

The acquisition won't result in any layoffs or changes in operations at ATL's Bothell headquarters, spokeswoman Jane Hedberg said.

"Basically, it's business as usual," she said, adding the headquarters will remain at its present site.

The company employs 1,300 people in Bothell and 1,300 more in offices around the world.

ATL shareholders will receive $50.50 a share in the deal, a 19 percent premium over the company's closing stock price yesterday. The acquisition news pushed ATL's stock up $7.938 to a record $50 in midday trading today.

The stock's previous high, set in May, was $49.25. But the shares generally have traded much lower. The 52-week low, in February, was just under $33.

ATL's board has unanimously approved the offer. It will be effective once Philips obtains a majority of ATL's shares and receives customary regulatory approval, the companies said.

ATL, then known as Advanced Technology Laboratories, was originally acquired by Squibb in 1980. It became part of a Squibb subsidiary, Westmark International, which became publicly traded in 1986. In 1992, Westmark International was dissolved, and its two units, ATL and SpaceLabs Medical, were spun off to form separate, publicly traded companies. A year ago last Saturday, Advanced Technology Labs changed its name to ATL Ultrasound.

ATL, which had 1997 sales of $430 million, pioneered broadband digital ultrasound and software technologies. Its equipment allows medical personnel to look into the human body. A common use is visual inspections of pregnancies.

ATL will be folded into Philips Medical Systems, a 9,000-employee subsidiary of Philips Electronics.

"This acquisition underscores our commitment to global leadership in worldwide diagnostic imaging by building on the success of ATL," said Hans Barella, chairman and chief executive of Philips Medical Systems. Philips Medical Systems is already a global leader in the X-ray business and diagnostic-imaging systems and services.

ATL will gain access to Philips' research and technology base, expand its service support and increase sales, the companies said.

"Combining the strengths of Philips Medical Systems and ATL creates a diagnostic-imaging business second to none," said Dennis Fill, ATL chairman and chief executive. "With essentially no overlap in our products and technologies, we believe this combination is the perfect match for both companies."

Fill said the trend for medical-device companies is to join larger companies that offer higher visibility and broad product lines, which represent competitive advantages.

Operating as a lone company with basically a single product line "leaves you with a certain amount of vulnerability," he said.

The acquisition by Philips may ease some of that strain.

"The very corporate image they lend to ATL is very helpful," Fill said. "Our market share, I think, will clearly be enhanced by this relationship."

Worldwide ultrasound sales are estimated at $2.5 billion. High-frequency soundwaves allow for imaging the body's organs, soft tissue and blood flow without entering the body.

ATL today also issued second-quarter and six-month profits slightly ahead of Wall Street expectations. For the three months ended June 30, profit was $5.45 million, or 35 cents a share, 1 to 2 cents a share better than forecast. That was 114 percent better than the year ago's $2.5 million, or 17 cents a share. Sales rose 11 percent, to $112 million from $101 million.

For six months, profit was $7.6 million, or 50 cents a share, 66 percent above the year ago's $4.6 million, or 31 cents a share. Sales rose 8 percent, to $217 million from $201 million.

Greg Heberlein's phone message number is 206-464-2267. His e-mail address is: gheberlein@seattletimes.com Tyrone Beason's phone message number is 206-464-2251. His e-mail address is: tbeason@seattletimes.com