HP to Buy Defibrillator Maker in Stock Swap

Hewlett-Packard Co. bolstered its cardiac defibrillator unit Monday with an agreement to acquire Heartstream Inc. in a stock swap valued at $135 million to $145 million.

Heartstream is a Seattle-based maker of automated external defibrillators, which are battery-powered gadgets to return an irregularly beating heart to normal. Hewlett-Packard, best known as a giant in the computer product and peripheral industry, is a leading provider of manual defibrillators.

Heartstream’s defibrillator, called the ForeRunner, is designed to be portable and easy to use. It is geared toward people who receive minimal training in emergency health care, such as police, airline cabin attendants and industrial first-aid teams.

Palo Alto-based HP has been selling its manual defibrillators, such as its Codemaster products, to hospitals and clinics. It recently expanded to pre-hospital markets, such as paramedics.

Under the exchange formula, Heartstream shareholders will receive HP stock with a value to be determined by dividing $11 by the average closing price of HP stock for the five trading days before the close of the deal.

An HP spokeswoman said the total value of the deal ranges from $135 million to $145 million, assuming 11.8 million Heartstream shares outstanding and the exercise of 1.8 million options.

“Combining Heartstream’s technology and ForeRunner products with HP’s current family of external defibrillators will allow us to strengthen our commitment to the cardiac chain of survival,” Stephen Rusckowski, general manager of HP’s cardiology products division, said in a statement.

When the deal is completed, Heartstream is expected to become part of HP’s cardiology products division.

Heartstream’s stock lost $1.13 to close at $10.75 on Nasdaq; Hewlett-Packard gained 56 cents to close at $60.94 in New York Stock Exchange trading.