TEL AVIV, Dec 8 (Reuters) - Medical device maker CovidienPLC will acquire Israeli camera-in-a-pill maker GivenImaging for $30.00 per share in cash, or a total of$860 million, the companies said on Sunday.
Given Imaging has developed technology forvisualising, diagnosing and monitoring the digestive system,including its PillCam, a swallowed capsule endoscope. Its sharesclosed at $23.65 on Nasdaq on Friday.
"We believe GI (gastrointestinal) is one of the mostattractive specialty procedure areas. Acquiring Given willenable Covidien to significantly expand its presence in a $3billion GI market," said Bryan Hanson, group president formedical devices and the United States at Covidien.
"Adding Given's portfolio of diagnostics to our portfolioaccelerates Covidien's strategy of providing physicians withproducts that support the patient along the care continuum fromdiagnosis to treatment."
The combination of Covidien's global presence and GivenImaging's innovative capabilities has the potential to transformthis market, said Homi Shamir, chief executive of Given Imaging.
The transaction is expected to be completed by March 31. Theboards of directors of both companies have approved the deal,and the boards of Given's major shareholders, who own 44 percentof Given's outstanding shares, have approved voting in favour ofthe transaction.
On Saturday, three units of Israel's IDB Group - ElronElectronic Industries, Discount Investment Corp and RDC Rafael Development Corp - agreed to sell theirstakes in Given Imaging.
Covidien intends to finance the transaction through cash onhand and will report Given Imaging within the medical devicesbusiness segment. Covidien expects Given Imaging will addbetween $40 million and $50 million per quarter in incrementalrevenue to the medical devices segment.
On a GAAP basis, the transaction is expected to be dilutiveto operating margin and earnings per share in fiscal 2014. On anadjusted basis, excluding one-time items and transaction costs,management expects the transaction to be neutral to bothoperating margin and EPS in fiscal 2014.
The transaction is expected to be accretive to operatingmargin and EPS both on a U.S. GAAP and on an adjusted basis infiscal 2015 and beyond.
Covidien said it is not changing any of its guidance as aresult of this transaction.
- Mergers, Acquisitions & Takeovers