Natus Buys Grass Technologies for $18.6 Million

Natus pays equivalent to sales, a sizeable discount to its own P/S ratio.

By Rich Smith – Feb 2, 2013 at 9:21AM EST

On Friday, infant-testing medical-equipment maker Natus Medical (BABY +0.00%) announced that it has acquired Astro-Med (ALOT +1.54%) subsidiary and neurophysiological recording instruments manufacturer Grass Technologies Product Group. Grass specializes in the production of polysomnography and electroencephalography systems used in both clinical and research work.

In a press release on the acquisition, Natus clarified that it paid $18.6 million cash for Grass, or almost precisely the company's annual sales of $18.5 million. That represents a sizable discount to the 1.4 sales ratio Natus' own shares fetch.

Natus expects the acquisition to quickly become accretive on a pro forma basis, adding to earnings in both Q2 and full-year 2013.

Investors reacted positively to the news, bidding Natus shares up 1.8% Friday to close at $12.54.

Rich Smith is a contributing Motley Fool defense and stock market analyst covering publicly traded and emerging companies in defense, space, aerospace, and other sectors. Prior to The Motley Fool, Rich practiced international corporate law for Clifford Chance in Russia, and for the Russian-Ukrainian Legal Group in Moscow, Kyiv, and Washington, D.C. He holds a bachelor’s degree in international relations from the College of William & Mary, a law degree from the University of Baltimore, and a language certification from the International Institute of Russian Language & Culture in Tver, Russian Federation. The Globe and Mail once featured him as “one of the best stock pickers since 2009.”

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Natus Buys Grass Technologies for $18.6 Million

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