PillCam Maker Given Imaging to Be Bought by Covidien for $860M
December 10, 2013 Leave a comment
PillCam Maker Given Imaging to Be Bought by Covidien
Hospital Equipment Maker to Pay $860 Million
JOSEPH WALKER
Dec. 8, 2013 7:20 p.m. ET
Given Imaging Ltd. GIVN +0.81% , a maker of ingestible pills that take photos inside patients’ bodies, agreed Sunday to be acquired by Covidien COV +0.86% PLC for $860 million. Covidien will pay $30 a share, a nearly 27% premium to Given Imaging’s share price of $23.65 in 4 p.m. Nasdaq trading Friday.Dublin-based Covidien said it would use cash on hand to pay for the deal, which it expects to complete by March 31.
Given Imaging had said in January that it had ended its exploration of a sale or merger that it had begun in 2012, having concluded that continuing to operate independently was its best path forward. This October, however, a large investor publicly urged Given Imaging to auction itself off. The investor, Discovery Group, had said that the Israeli company had been “chronically undervalued” because of mismanagement.
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PillCam SB 2 Capsule TransparentBack Given Imaging
“After thoroughly evaluating our strategic options we determined that this transaction is in the best interests of Given Imaging, its shareholders and employees,” Homi Shamir , Given Imaging’s chief executive, said in a statement Sunday.
Given Imaging’s PillCam technology, which accounted for two-thirds of its $180 million in sales last year, is used to detect and monitor gastrointestinal bleeding and colon abnormalities. The pills are the size of large vitamins and have miniature cameras embedded inside. They wirelessly transmit images to recording devices that the patient wears tied around his waist.
PillCam, which is available in 75 countries, including the U.S., is marketed as a minimally invasive alternative to traditional endoscopy, which in some cases requires that patients be sedated to have long thin tubes with cameras at the end threaded down their esophagus.
Covidien, a supplier of hospital equipment, surgical tools and medical devices, had $10.2 billion in sales for the fiscal year ended Sept. 30. The company is facing pricing pressure from hospitals in the U.S. and Europe that are trying to keep down costs.
The deal for Given Imaging allows Covidien to leverage its customer base to quicken sales growth for PillCam, which has slowed recently.
“The combination of Covidien’s established global presence and Given Imaging’s innovative capabilities has the potential to transform this market,” said Given Imaging’s Mr. Shamir.
Covidien was formed in 2007, when it was split from Tyco International Ltd. TYC +1.34%The purchase of Given Imaging would be its largest deal since its $2.6 billion acquisition of ev3 Inc. in 2010.
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