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ArchiMed takes Natus Medical private for $1.2B

Apr 18, 2022
Illustration of a spotlight shining on a brain.

Illustration: Gabriella Turrisi/Axios

French investment firm ArchiMed agreed to acquire Natus Medical (Nasdaq: NUTUS) for approximately $1.2 billion, taking the Middleton, Wisconsin-based medical device company private.

Why it matters: Operating as a private company arguably gives Natus an opportunity to better steer its offerings — which span neurological, audiology and infant diagnostics and monitoring— toward higher-growth areas.

  • Under ArchiMed, a health care-exclusive investment firm, that’s likely to involve more M&A, and it could include parting ways with certain businesses that aren’t core.
  • A banker source tells Axios, "My guess: this is not just a take-private" and keep it as is. "This is about big portfolio moves — getting out of businesses potentially and M&A to drive growth.”
  • “The company had lost its way a bit and found itself where it didn’t really have the capacity to drive a big M&A strategy in the public markets."

Zoom in: Natus provides solutions for the diagnosis, monitoring and treatment of disorders affecting the brain, neural pathways and eight sensory nervous systems.

  • The company historically focused on one market, neuromonitoring, but over time entered two new categories — neonatal care products and hearing and balance devices.

The big question: Which direction does ArchiMed want to take Natus? Will it keep the audiology business and get out of neuromonitoring, or vice versa? Or does the newly backed company have an angle to keep and grow both?

By the numbers: Natus shareholders will receive $33.50 in cash per share, reflecting a 29% premium over Friday’s closing share price.

  • Shares of Natus jumped as high as 28.94% in mid-morning trading Monday.

Flashback: Tom Sullivan was named CEO in December 2021 following the resignation of Jonathan Kennedy.

  • Kennedy only three-and-a-half years earlier replaced Jim Hawkins after his 14 years at the helm, following a successful change-of-control campaign instigated by hedge fund Voce Capital Management.

Context: Natus is the first bet this year for ArchiMed, which despite its European roots has been doubling down on North America health care investing.

  • In 2021, Archimed added five professionals to its New York-based roster, including adding Justin Bateman as a partner from BC Partners, along with transfers from its Lyon office.
  • Last year it made seven platform investments, along with two refinancing transactions of existing portfolio companies and several portfolio add-ons.

The bottom line: ArchiMed's backing could give Natus a jolt after a period of lackluster growth.

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