(NYSE: COV), a leading global provider of healthcare products, announced today that it has entered into a definitive agreement with Integra LifeSciences Corporation to sell its Confluent Surgical product line. The transaction is expected to close by March 31, 2014, subject to receipt of regulatory approvals.
Under the terms of the agreement, Covidien will receive an initial cash payment of $235 million from Integra upon the closing of the transaction. Additionally, Covidien may receive up to $30 million, contingent upon the achievement of certain performance measures related to the transition of the Confluent Surgical business to Integra.
"This transaction allows Covidien to better focus on its global strategic priorities," said Bryan Hanson, Group President, Medical Devices & U.S., Covidien. "Based on Integra’s presence in neurosurgery and spine surgery combined with a strong portfolio of clinical evidence, we believe these products will thrive under Integra’s ownership. We express our sincere gratitude to our dedicated employees and the clinicians who have partnered with us throughout the years."
Confluent Surgical products include: DuraSeal™, DuraSeal™ Exact/Xact, VascuSeal™ and SprayShield™. These products are part of the soft tissue repair category of Covidien’s Medical Devices business and generated approximately $65 million in sales in fiscal 2012.
Assuming a closing on or before March 31, 2014, Covidien expects the transaction to be several cents dilutive to fiscal 2014 earnings per share; however, the underlying strength of Covidien’s existing businesses is expected to offset this dilution. As a result, Covidien does not anticipate this transaction will have a material impact on its fiscal 2014 outlook.
Covidien is a leading global healthcare products company that creates innovative medical solutions for better patient outcomes and delivers value through clinical leadership and excellence. Covidien manufactures, distributes and services a diverse range of industry-leading products in medical devices and supplies. With 2012 revenue of $9.9 billion, Covidien has 38,000 employees worldwide in 70 countries, and its products are sold in over 140 countries. Please visit
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Any statements contained in this communication that do not describe historical facts may constitute forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Any forward-looking statements contained herein are based on our management's current beliefs and expectations, but are subject to a number of risks, uncertainties and changes in circumstances, which may cause actual results or Company actions to differ materially from what is expressed or implied by these statements. The factors that could cause actual future results to differ materially from current expectations include, but are not limited to, the possibility that the transaction will not close or that the closing may be delayed, our ability to effectively introduce and market new products or keep pace with advances in technology, the reimbursement practices of a small number of large public and private insurers, cost-containment efforts of customers, purchasing groups, third-party payors and governmental organizations, intellectual property rights disputes, complex and costly regulation, including healthcare fraud and abuse regulations and the Foreign Corrupt Practices Act, manufacturing or supply chain problems or disruptions, rising commodity costs, recalls or safety alerts and negative publicity relating to Covidien or its products, product liability losses and other litigation liability, divestitures of some of our businesses or product lines, our ability to execute strategic acquisitions of, investments in or alliances with other companies and businesses, competition, risks associated with doing business outside of the United States, foreign currency exchange rates and environmental remediation costs. These and other factors are identified and described in more detail in our Annual Report on Form 10-K for the fiscal year ended September 28, 2012, and in subsequent filings with the SEC. We disclaim any obligation to update these forward-looking statements other than as required by law.