The joint venture is headquartered in the Netherlands and will be managed by a team of experienced professionals from both Philips Medical Systems and SHL. The goal of the joint venture is to establish medical call centres and remote monitoring services for people with cardiac disease across Europe. The joint venture plans to commence operations in 2001. Closing of the transaction is subject to the approval of SHL TeleMedicine Ltd.'s audit committee and Board of Directors. Philips Medical Systems and SHL have agreed on an ownership structure according to which Philips Medical Systems will initially own 80.1 percent of the joint venture and SHL 19.9 percent. SHL has the option of increasing its stake to 35 percent over the coming years.
Countries to be covered by the joint venture include those in the European Union as well as other European countries, Eastern Europe, Switzerland, and the former members of the Soviet Union. The joint venture will exclude the United Kingdom, Portugal, and Croatia, where SHL TeleMedicine already has exclusive arrangements with other partners. SHL expects to generate revenues through this joint venture from royalties, the sale of devices to the joint venture and the distribution of dividends. The newly launched joint venture will specialise in remote monitoring equipment and services in the field of cardiology and will be based on the same business model which SHL has successfully developed in Israel over a period of 13 years.
SHL's subscribers currently number more than 55.000 in Israel, where it has successfully leveraged its superior technology and user-friendly devices. SHL will bring to the joint venture its personal telemedicine products to provide remote monitoring services for a variety of patients, ranging from chronically ill individuals to other consumers of health care products who wish to take a more active role in managing their health. Individuals can transmit indications of cardiac function, including 12-lead EKG, via phone to a medical call centre staffed with trained medical personnel for analysis and consulting. Call centre staff may instruct patients to take additional action. If necessary, an ambulance can be dispatched.
The joint venture will offer a fully integrated range of products and services: hardware and end-user products for call centres and patients, a database management application, software modules for receiving, displaying and measuring end-user data, and Internet technology allowing real time access to subscribers' medical records. Hans Barella, CEO and President of Philips Medical Systems, stated: "After the announced acquisitions of ADAC Laboratories and the proposed acquisition of Agilent Healthcare Solutions Group in the USA, we are very happy to start a new business initiative in Europe. We believe that there is a large unmet demand for personal health care services throughout Europe. We are fortunate to have SHL TeleMedicine as our partner in this enterprise and have found an experienced and highly qualified management team to lead this new venture."
Yoram Alroy, CEO and Chairman of SHL TeleMedicine observed: "With Philips, we have found a strong strategic partner to develop our business outside Israel faster and more efficiently than would be otherwise possible. Philips is an experienced partner with a management team that possesses excellent knowledge of the medical systems market, particularly in cardiology. Philips has a strong customer base ranging from hospitals to individual consumers and has a highly recognised brand name. This is an ideal strategic fit." Philips Medical Systems is a leading supplier of diagnostic imaging systems and related services worldwide, represented in more than 100 countries and employing 12.700 people. A worldwide network of research and development and sales and service organisations backs Philips' products.
SHL TeleMedicine Ltd. develops and markets advanced personal telemedicine systems as well as medical call centre services to subscribers. It provides remote monitoring services in cardiology and pulmonology for a variety of patients ranging from individuals with a medical history or chronically ill individuals to other consumers who wish to take a more active role in managing their health. Individuals can transmit indications of cardiac or pulmonary functions, such as 12-lead EKG, blood pressure and spirometry readings, via phone to a medical call centre staffed with trained medical personnel for monitoring, analysis and instruction. More information about the SHL activities is available in the VMW article Introduction of WatchMan enhances Personal Emergency Response System.