Natus Medical Incorporated Acquires Hawaii Medical

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SAN CARLOS, Calif.--(BUSINESS WIRE)--Natus Medical Incorporated (Nasdaq:BABY - News) today announced that it acquired privately-held Hawaii Medical LLC on July 2, 2009. Massachusetts based Hawaii Medical manufactures and markets single-use disposable products sold into the NICU and nursery in hospitals.

Natus acquired Hawaii Medical for a cash price of $2.9 million, with the potential for additional consideration depending upon the achievement of certain revenue targets. Hawaii Medical reported revenue of approximately $3.2 million in the twelve months ended June 30, 2009, selling substantially all of their products through a single national distributor in North America. Natus expects to transition those sales to its existing newborn-care direct sales force during the third quarter of 2009 and launch these products internationally in the fourth quarter.

Jim Hawkins, President and Chief Executive Officer of Natus commented, “Hawaii Medical has created a successful market leading brand in the newborn care market through the development of innovative products that meet the demanding needs of clinicians in the NICU and nursery. We plan to integrate and transition production of Hawaii Medical products into our Olympic Medical facility in Seattle during our third quarter, and expect the acquisition to be accretive to earnings per share in the first full quarter of ownership.”

“I am pleased to announce that Hawaii Medical founder Read McCarty will stay on with Natus in a consulting role and concentrate on continuing to develop innovative products for the newborn care market. Prior to starting Hawaii Medical, Mr. McCarty founded Children Medical Ventures that is currently owned by Phillips Medical,” added Hawkins.

About Natus Medical

Natus is a leading provider of healthcare products used for the screening, detection, treatment, monitoring and tracking of common medical ailments such as hearing impairment, neurological dysfunction, epilepsy, sleep disorders, and newborn care. Product offerings include computerized neurodiagnostic systems for audiology, neurology, polysomnography, and neonatology, as well as newborn care products such as hearing screening systems, phototherapy devices for the treatment of newborn jaundice, head-cooling products for the treatment of brain injury in newborns, and software systems for managing and tracking disorders and diseases for public health laboratories.

Additional information about Natus Medical can be found at www.natus.com.

This press release contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995, particularly statements regarding the expectations, beliefs, plans, intentions and strategies of Natus. These forward-looking statements include, but are not limited to, statements regarding the benefits of the acquisition of Hawaii Medical by Natus, including the expected accretive impact of the acquisition on the earnings of Natus, the transition to direct sales, expansion of sales into international markets, and integration of production into existing operations. These statements relate to future events or Natus’ future financial performance or results, and involve known and unknown risks, uncertainties and other factors that may cause actual results, levels of activity, performance, or achievements to differ materially from those expressed or implied by the forward-looking statements. Forward-looking statements are only predictions and the actual events or results may differ materially. Natus cannot provide any assurance that its future results or the results implied by the forward-looking statements will meet expectations. Our future results could differ materially due to a number of factors, including the effects of competition, the demand for our products and services, our ability to expand our sales in international markets, our ability to maintain current sales levels in a mature domestic market, our ability to control costs, and risks associated with bringing new products to market and integrating acquired businesses. Natus disclaims any obligation to update information contained in any forward-looking statement.

More information about potential risk factors that could affect the business and financial results of Natus is included in Natus’ annual report on Form 10-K for the year ended December 31, 2008, and its quarterly reports on Form 10-Q, and in other reports filed from time to time by Natus with the U.S. Securities and Exchange Commission.

Contact:

Natus Medical Incorporated Steven J. Murphy, 650-802-0400 Vice President Finance and Chief Financial Officer InvestorRelations@Natus.com

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