Philips to buy medical device maker Volcano for $1.2 billion

Philips said the acquisition would lead to synergies in research and development and sales, and would add to Philips' earnings per share by 2017.

The offer, a public tender of $18 per share, is at a premium of about 57 percent to Volcano's closing price on Tuesday.

Volcano makes imaging catheters that can be inserted into veins to make ultrasound scans of the interiors of blood vessels, in order to conduct internal surgery without putting patients under the knife.

Clinicians using the catheters are guided by maps created on Philips' X-ray machines.

Philips' Chief Executive Frans van Houten said owning Volcano would give Philips a more continuous presence in hospitals and a closer relationship to customers.

"We typically sell a catheter lab to a hospital and it sits there for the next 10 years and we don't visit the cardiologist on a daily basis. Volcano have a disposable business. They are in the cath lab on a daily basis," he said.

"In an aging world with more chronic disease, health and healthcare are enormous opportunities that we want to focus on."

Philips, until recently a diversified conglomerate that made everything from televisions to lightbulbs to X-ray machines, is in the process of spinning off its historic lighting division to focus on its high-margin healthcare business.

Its largest healthcare acquisition prior to the Volcano deal was the $5.1 billion acquisition of sleep apnea treatment company Respironics in 2007.

(Reporting by Thomas Escritt in Amsterdam and Supriya Kurane in Bengaluru; Editing by Gopakumar Warrier and Clara Ferreira Marques)

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