Benzinga | Mar 25, 2021 09:56AM EDT

Philips Divests Appliances Business To Hillhouse For $4.4B: Bloomberg

Royal Philips NV (NYSE: PHG) is divesting its domestic-appliances unit to private equity firm Hillhouse Capital in a deal worth $4.4 billion ((euro)3.7 billion) to accelerate its conversion into a healthcare equipment maker post exit from the consumer-electronics businesses, Bloomberg reports.

* Philips expects cash proceeds of (euro)3 billion upon deal completion by the third quarter.

* CEO Frans van Houten initiated a string of health-related acquisitions to consolidate Philips' telehealth and diagnostics portfolio and optimize costs for hospitals and clinics.

* Philips completed the acquisition of remote medical technology company BioTelemetry, Inc (NASDAQ: BEAT) for $2.8 billion on February 9. Philips also acquired Capsule Technologies, a medical device integration and data technology for hospitals and healthcare organizations, for $635 million.

* The company wants to focus on extending health technology leadership upon the divestment.

* Philips finalized Hillhouse betting on the Asia-focused investor's appropriateness for the appliances business. The divested business agreed to pay (euro)700 million to keep using the Philips brand for 15 years. Philips' appliances business had produced (euro)2.2 billion in sales last year.

* PHG stock has gained 61% in the last year.

* Price action: PHG shares are trading higher by 0.95% at $56.39 on the last check Thursday.