LONDON - Covidien has agreed to acquire the Israel medical technology company Given Imaging in a deal valued at about $860 million, expanding the scope of its gastrointestinal diagnostic testing business.
The Dublin health care products company will acquire all the outstanding stock of Given for $30 a share, a 27 percent premium on the company’s closing of $23.65 on Friday. Given’s products include PillCam, a capsule that is swallowed and contains a small camera allowing doctors to view the intestinal tract in a less-invasive way.
“Acquiring Given will enable Covidien to significantly expand its presence†in a $3 billion gastrointestinal market, said Bryan Hanson, group president, Covidien’s medical devices and United States operations. “Adding Given’s portfolio of diagnostics to our portfolio accelerates Covidien’s strategy of providing physicians with products that support the patient along the care continuum from diagnosis to treatment,†he said.
The deal is subject to regulatory and shareholder approval. Covidien expects the deal to be completed by March 31.
The boards of both companies as well as shareholders holding 44 percent of Given’s outstanding shares have signed off on the deal.
Covidien, which will use cash on hand to finance the transaction, said that it expected Given to add $40 million to $50 million in revenue a quarter to its medical devices segment. Covidien reported 2013 revenue of $10.2 billion and has more than 38,000 employees in worldwide.
“After thoroughly evaluating our strategic options we determined that this transaction is in the best interests of Given Imaging, its shareholders and employees and provides unique benefits to patients globally,†said Homi Shamir, Given’s president and chief executive.
