Item 1.01 Entry into a Material Definitive Agreement

On January 5, 2013, Natus Medical Incorporated (the "Company") and Astro-Med Inc. ("Astro-Med") and Grass Technologies Corporation, a wholly-owned subsidiary of Astro-Med, entered into an Asset Purchase Agreement (the "Purchase Agreement") pursuant to which the Company will acquire the Grass Technologies Product Group (the "Business") from Astro-Med.

Pursuant to the Purchase Agreement, the Company will acquire for a cash purchase price of $18.6 million the assets of the Business consisting principally of working capital of not less than $2.0 million, the assembled workforce, intellectual property, and certain other related assets. The purchase price is subject to adjustment depending upon the level of working capital in the Business on the date of the acquisition.

Based in West Warwick, Rhode Island, the Grass Technologies Product Group includes clinically differentiated neurodiagnostic and monitoring products, including a portfolio of polysomnography (PSG) and electroencephalography (EEG) systems for both clinical and research use and related accessories and proprietary electrodes. The Business generated sales of approximately $18.5 million in the year ended January 31, 2012.

It is expected that the transaction contemplated by the Purchase Agreement will be consummated on January 31, 2013.

The acquisition will be funded by existing cash of the Company and borrowings on the Company's existing credit facility with Wells Fargo Bank National Association ("Wells Fargo").