Irish medical device giant Covidien plc (COV) recently acquired Florida-based New Wave Surgical for more than $100 million. Shares of Covidien rose 1.3% in the trading session following the news release and closed at $69.92 yesterday.
New Wave Surgical's founder and former president R. Alexander Gomez confirmed the sale last Thursday. Though the exact price of the deal was not disclosed, it will ultimately be revealed in the upcoming public filings.
New Wave Surgical manufactures the Defogging Heated Endoscopic Lens Protector (or D-Help) system, designed and invented by Gomez. The device, manufactured in New Wave Surgical’s Pompano Beach facility, keeps laproscopic and robotic lenses heated, defogged and clean during surgical procedures. Covidien acquired the same and changed the name of the device to Clearify Visualization System.
New Wave Surgical had secured a U.S. Food and Drug Administration (:FDA) approval for its D-Help System in Oct 2006 after which it was commercially launched in Oct 2007. Though the device was selling globally, New Wave Surgical lacked the scale to take full advantage of the worldwide market for the device.
New Wave Surgical had been facing difficulty in raising capital to fund an expansion when it was acquired by Covidien. Gomez wanted to make D-Help system the standard of care and enjoy a successful exit with the right partner. With its global footprint and sales force spread all over the world, the decision to sell off its operations to Covidien was a natural one.
Subsequent to the sale, Gomez and most of the New Wave Surgical team have moved on, although the manufacturing plant has remained at Pompano Beach. Presently, Gomez has plans to start a healthcare fund with his partners in order to help young entrepreneurs navigate the rapidly changing healthcare industry with strong mentorship and capital.
Currently, Covidien retains a Zacks Rank #2 (Buy). Other stocks performing well in the medical products industry are Syneron Medical Ltd. (ELOS), Owens & Minor Inc. (OMI) and St. Jude Medical Inc. (STJ). While Syneron Medical enjoys a Zacks Rank #1 (Strong Buy), Owens & Minor and St. Jude Medical carry a Zacks Rank #2 (Buy).