Dutch electronics business Royal Philips Company plans to bolster its investment in its health tech business. The company announced yesterday it would sell 25 percent of its other major business, lighting, on the public markets in order to further separate the two businesses and raise money to support the growing health tech business.
“Today’s announcement is an historic one for Philips as we aim to separate our company into two market-leading companies focused on capturing opportunities in the health technology and connected LED lighting solutions markets, respectively," Royal Philips CEO Frans van Houten said in a statement.
"We believe that the recent performance of both companies demonstrates that the fundamentals are in place for long-term profitable growth and that Philips Lighting is well positioned for success as a stand-alone company," he continued. "... We believe Philips Lighting’s future status as a listed entity will strengthen its position as a global market leader in connected LED lighting solutions. At the same time, Royal Philips will focus on the exciting and fast growing health technology market.”
Philips plans to launch an IPO on the Euronext Amsterdam, a Dutch exchange. The company will initially sell off 25 percent of its shares, but plans to gradually sell more over time.
The company announced its newfound focus on health last fall at an event where it also unveiled a suite of connected health products, including a health-tracking smart watch with an optical heart rate sensor, accelerometer, and sleep tracking; a tubeless, rechargeable upper arm blood pressure monitor; a smaller rechargeable blood pressure monitor for the wrist; a body analysis scale that measures weight, estimates body fat, and calculates BMI; and an ear thermometer that returns results in two seconds.
In a recent quarterly report, Philips reported growth in the health business, with six percent sales growth in the personal health space, five percent sales growth in diagnosis and treatment, and nine percent sales growth in connected care and health informatics.