Intermagnetics bought for $1.3 billion

has signed an agreement with

under which Philips will acquire Intermagnetics for $27.50 per share or a total equity value of approximately $1.3 billion.

According to a statement, the board of directors of Intermagnetics has unanimously approved the proposed transaction. Completion of the transaction is subject to regulatory approval, to the terms and conditions of the merger agreement and to the approval of Intermagnetics' shareholders.

Intermagnetics develops, manufactures and markets high-field superconducting magnets used in Magnetic Resonance Imaging (MRI) systems. Intermagnetics also provides specialised MRI compatible patient monitoring devices and Radio Frequency (RF) coils that are predominantly supplied to hospitals.

The acquisition will allow Philips to significantly rationalise its supply chain, to enhance its competitive position and to participate in the fast growing market for RF coils. Philips anticipates the transaction to be accretive to its operating margin towards the end of 2007. There will be a one-time charge of approximately €85 million related to in-process R&D expenses, integration of supply chain and various purchase accounting items, taken in the latter half of 2006.

Magnetic Resonance Imaging is one of the key imaging technologies in radiology departments in hospitals. In 2005, total MRI market was approximately €5 billion, and consisted of MRI systems, services and accessories (such as RF coils).

Over the past 10 years, the number of MRI procedures grew on average by 10 percent per year. This has been driven by an increasing number of diagnostic applications.