by Brendon Nafziger
, DOTmed News Associate Editor | June 02, 2010
Covidien is buying cardiovascular equipment maker ev3 for $2.6 billion, or around $22.50 per share in cash, while also jettisoning its sleep therapy business, the medical giant announced Tuesday.
Only a week after dropping an industrial chemical line it inherited from old parent company Tyco as part of its strategy to focus on high-performing segments of its business, Covidien said it was plunging deeper in the cardiovascular market by acquiring 10-year-old ev3, which makes stents, angioplasty balloons and catheters.
"The acquisition of ev3 will enable Covidien to significantly expand its presence in the vascular market and is in line with our strategy of becoming a leading partner with vascular surgeons, neurosurgeons, interventional cardiologists and interventional radiologists," Covidien's president and CEO Richard J. Meelia said in a statement.
For those who need to move fast and expand clinical capabilities -- and would love new equipment -- the uCT 550 Advance offers a new fully configured 80-slice CT in up to 2 weeks with routine maintenance and parts and Software Upgrades for Life™ included.
Covidien is buying the Plymouth, Minn.-based company for a 19 percent premium based on Friday's close. Covidien expects to complete the deal by the end of July, with the purchase diluting earnings per share by 5 to 8 cents for fiscal 2010, and 10 to 15 cents in fiscal 2011.
In a separate announcement Tuesday, Covidien said it was selling its sleep therapy continuous positive airway pressure and bi-level products to PH Invest, a holdings company from Luxembourg. Terms of the deal were not announced.
The sale follows a recent trend of Covidien's as it pares back on its various sleep therapy and diagnostics lines. In September, Covidien sold its sleep diagnostic business Sandman to Embla.
"Basically, we're trying to streamline our portfolio and reallocate resources to businesses that are more profitable and growing faster for us," Covidien spokesman Bruce Farmer told DOTmed News at the time.
Covidien will hold onto its sleep interface products, known as Adam, Breeze and Dreamfit, the company said.
In the same announcement, Covidien said it had completed the sale, for an undisclosed amount, of its U.S.-based radiopharmacies to Triad Isotopes Inc., of Orlando, Fla.
Dublin-based Covidien's stocks fell 0.57 percent to hit $42.15 in recent trading.