NEW YORK (TheStreet) -- Volcano (VOLC) shares are up 55.2% to $17.83 on extremely heavy volume on Wednesday after the precision medical device manufacturer was purchased by Philips (PHG) for $1.2 billion today.
Philips, the diversified manufacturer of products ranging from televisions to x-ray machines, said that the move was intended to take advantage of a burgeoning healthcare market.
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"In an ageing world with more chronic disease, health and healthcare are enormous opportunities that we want to focus on," said Philips CEO Frans Van Houten. The Volcano acquisition is expected to begin positively impacting Philips EPS by 2017.
TheStreet has further coverage of the acquisition here.
TheStreet Ratings team rates VOLCANO CORP as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
"We rate VOLCANO CORP (VOLC) a SELL. This is driven by multiple weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity, weak operating cash flow, generally disappointing historical performance in the stock itself, generally high debt management risk and feeble growth in its earnings per share."