Digirad deals medical device sales & service biz to Philips for $8m

Digirad Corp. (NSDQ:DRAD) said yesterday it inked an agreement to sell its medical device sales and service business and associated contracts to Royal Philips (NYSE:PHG) for $8 million.

The divested MDSS business provides post-warranty maintenance for large diagnostic imaging equipment, mostly in the upper mid-west region of the US, Suwanee, Ga.-based Digirad said.

“Over the last few months we have been evaluating our opportunity to run this service business outside our prior Philips relationship, and we determined that the best value for the business would be in the hands of Philips.  We are very pleased with the economics and outcome of this Agreement, and this transaction will better position Digirad to focus on its core business – providing convenient mobile diagnostic healthcare solutions,” prez & CEO Matt Molchan said in a press release.

The deal is subject to customary closing conditions and is expected to close Jan. 31, the company said. Digirad added that net proceeds from the sale will be applied to its existing line of credit from Comerica.

As part of the deal, Philips and Digirad said they agreed to extend a prior consolidated service agreement for installation and warranty services sold in the upper mid-west region through Jan. 31.

In October, Digirad said that Philips decided to terminate a remote services contract with Digirad’s DMS Health Tech subsidiary, effective December 31.

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