Medical technology company
) recently announced an agreement for the acquisition of
privately-owned Brazilian company, Intermed Equipamento Medico
Hospitalar Ltda. Sao Paulo-based Intermed is a developer,
manufacturer and supplier of medical equipment for use in
respiratory care including ventilators and accessories for
ventilation across Latin America.
BAXTER INTL (BAX): Free Stock Analysis Report
BECTON DICKINSO (BDX): Free Stock Analysis
CAREFUSION CORP (CFN): Free Stock Analysis
To read this article on Zacks.com click here.
The acquisition is expected to go through during CareFusion's
second quarter fiscal 2013, subject to customary conditions.
However, the financial terms of the agreement remain undisclosed.
Though the acquisition will be slightly dilutive to CareFusion's
fiscal 2013 earnings, it is expected to have a neutral impact on
earnings for fiscal 2014.
CareFusion is targeting a 12−14% compounded earnings per share
growth through fiscal 2015 on the back of capital allocation in the
form of suitable acquisitions and share buyback programs. The
upcoming acquisition of Intermed is in line with the company's
Brazil is one of the largest economies with a flourishing
healthcare sector, backed by government investments, burgeoning
middle class and higher formal employment. Thus, the acquisition is
a worthy investment in a high-value market as it is expected to be
accretive to CareFusion's top-line by generating $25 million
Going forward, CareFusion will accelerate its globalization
strategy and leverage sales for its Respiratory Technologies
business. The company reported 3% year over year revenue growth to
gross $968 million in the fourth quarter of fiscal 2012. It
recorded 29% sales growth in Respiratory Technologies in the
quarter. CareFusion also witnessed notable growth in the BRIC
nations in the most recent quarter.
Intermed is, thus a strategic fit in CareFusion's existing
respiratory product platform. The acquisition underlines the
company's efforts in expanding its foothold in the international
market, especially Latin America and other emerging markets.
CareFusion continues to build a solid foundation for future growth.
The company faces competition from
Becton, Dickinson and Company
) among others. While a slew of product recalls represent a
downside, CareFusion is growing both through the organic and the
We currently have a long-term Neutral recommendation on CareFusion,
supported by a short-term Zacks #1 Rank (Strong Buy).