Philips Hopes to Enlist Help from Allergan's CEO

The Dutch technology giant hopes its healthcare business will play an integral role in propelling its business forward.  

Brian Buntz

Dutch electronics giant Koninklijke Philips N.V. wants to focus on what it calls "HealthTech," and is moving forward with its plans to sell off its lighting business in an IPO next year. The cash the company wins from the move will be invested back into its healthcare operations, according to the Wall Street Journal. The company, however, has yet to provide more detailed information regarding its plans to allocate cash from the IPO. The traditional lines demarcating its healthcare and consumer technology businesses, however, are blurring, which could be behind its decision to name its future core business "HealthTech." Included in its healthcare lineup are consumer-facing medical devices like toothbrushes and baby monitors as well as dedicated medical devices for use in hospitals.

An earlier report from Bloomberg noted that the company plans to grow its health informatics business, which accounted for less than 10% of the company's sales in 2013.

The company also announced that it has proposed appointing Allergan CEO David E.I. Pyott to its supervisory board for the company's annual shareholder meeting scheduled for May 7. "His expertise will be invaluable in view of Philips' transition into a company focused on HealthTech," Philips explained in a statement. Pyott, who has worked at Allergan since 1998, will be out of a job after the company merges with Actavis in a transaction worth $66 billion.  

Pyott helped transform Allergan from a small eye-care company with $1 billion in yearly sales to a diversified healthcare company that brings in $5 billion annually. By 2014, Harvard Business Review had pegged him as the fourth best performing CEO in the world.

2010, Pyott was named lead independent director of Avery Dennison, a packaging firm that is also active in the healthcare market.

Philips' exit from the lighting industry was mirrored by Siemens AG, which left that market as the competition in that market stiffened with the rise in popularity of light emitting diode (LED) technology.

Brian Buntz is the editor-in-chief of MPMN and Qmed. Follow him on Twitter at @brian_buntz.

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