Natus Medical (BABY) Buys its Way into European Revenues

Gaining 9.87% ($1.56) this morning is Natus Medical Inc., (BABY) http://www.natus.com/ which is currently trading on the Nasdaq in the $17.04 range. The S&P SmallCap 600 company announced late yesterday it was acquiring Alpine Biomed Holdings (private) and BABY shares surged on the news in early trading. BABY has a new market cap of $486 million. BABY has a 3-Month average daily trading volume of 200,238 shares and it easily beat that volume two hours into today's session.

BABY acquired all the capital stock of Alpine for $43 million. In a move based on purely on growth, BABY now has access to European markets to sell its neurology products. It will also have a greater foothold in the Canadian markets. BABY funded the acquisition through available cash.

Baby bought the three primary divisions of Alpine brands that include: diagnostic neurology devices under the Alpine Dantec brand, located in Copenhagen, Denmark; spike and seizure detection software applications and associated devices sold under the Alpine Stellate brand, located in Montreal, Canada; and neurology disposable products and accessories sold through the Alpine Biomed brand.

What BABY also got in the deal was revenues...

Alpine reported revenue of approximately $35 million in the twelve months ended June 30, 2009.  With the exception of any costs of restructuring and other one-time charges, the new revenue streams should turn up on the Q4 09 earnings for BABY. Third-party, cross-selling of BABY and Alpine products producing the revenues of that $35 million accounted for approximately $33 million. BABY should now be able to take a greater share of those revenues.

"Approximately two-thirds of Alpines revenue is from outside the United States, and Alpine is the market leader in electromyography diagnostics, or EMG, in Europe with its well established Keypoint product line," Natus Chief Executive Jim Hawkins said in a statement. "We plan to leverage our combined direct sales channels in the United States and Canada and provide new distribution for Stellate and Alpine products through the Natus international distribution organization," Hawkins said.

BABY makes and sells neurondiagnostic and newborn care products. BABY provides healthcare products used for the screening, detection, treatment, monitoring, and tracking of common medical ailments in newborn care, hearing impairment, neurological dysfunction, epilepsy, sleep disorders, and balance and mobility disorders. BABY customers include: hospitals, clinics, laboratories, physicians, nurses, audiologists, and governmental agencies.

At $17.04, BABY is below its 52-week high of $26 set on 09-22-08 and is above its 52-week low of $6.46 set on 03-06-09. At $17.04, BABY is above both its 50-day and 200-day moving averages. BABY has trailing twelve month revenues of $155 million and a trailing twelve month diluted EPS of $0.50. Its shares out versus float ratio is near-parity.

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