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Covidien Buys Somanetics for $250M

Covidien agreed to acquire Somanetics for $25 a share in cash, or $250 million.
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NEW YORK (TheStreet) -- Covidien (COV) said Wednesday it has agreed to acquire Somanetics (SMTS) - Get Report for $25 a share in cash, or $250 million, as the acquirer strives to develop a global edge.

Somanetics shares closed Tuesday at $18.90, which makes the acquisition price a 32% premium.

The cash transaction will be followed by a second-step merger. The deal is expected to close by July 31, and could be dilutive to 2010 and 2011 GAAP earnings per share, neutral to 2010 earnings per share on a non-GAAP basis, and slightly accretive to 2011 earnings per share.

Once completed, the Somanetics business will be included in Covidien's oximetry and monitoring product line, which is part of the company's medical devices unit.

The acquisition is expected to be accretive to revenue and earnings growth rates over time.

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-- Reported by Andrea Tse in New York

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