NEW YORK (TheStreet) -- The last time I talked about Covidien (COV), I expressed shock and disappointment that no one else was interested in the company. While the larger med-tech rivals such as Johnson & Johnson (JNJ - Get Report) and Abbott Labs (ABT - Get Report) were posting in-line results, Covidien's management, which I believe has always been underrated, posted strong growth results with pinpoint execution.

Now Covidien is suddenly in the spotlight. Shares are up 30% year to date, one of the best performers not only in medtech but in the entire market. Contrary to prior estimates, I've seen no adverse impacts on the company's operation following the spinoff of its pharmaceuticals business to Mallinckrodt (MNK - Get Report).

If fact, while the lost revenue from the drugs business might appear as a negative, the post-Mallinckrodt operation seems leaner, which should add a boost to long-term margins. This is the same advantage gained by Abbott Labs upon spinning off its drug business AbbVie (ABBV - Get Report) earlier in the year. The question now is, Can Covidien's now-more-focused management find ways to sustain the company's growth momentum?

Never shy about doing deals, last week management announced plans to enter the $3 billion gastrointestinal (GI) market with a $860 million all-cash deal for Given Imaging (GIVN), a company with close to 90% global share in the growing endoscopy market.

So, with Given's large global reach, it is understandable Covidien opted to pay more perhaps than it would have liked. The deal valued Given at $30 per share, or 27% above its most recent closing price. On the flip side, Covidien is not a cash-rich company -- not according to the balance sheet, at least.

Management is paying roughly four times Given's fiscal 2014 revenue. This is yet another head-scratcher in determining what Covidien believes it is actually getting, especially with its poor history of margin performance.

But this is not the first time Covidien has puzzled the Street.

The company has never been shy about acquisitions since it was spun off from Tyco International (TYC) six years ago. But management has always found ways to not only make these deals work but, in most cases, to exceed Street expectations in both revenue and profits. I don't believe this deal, as questionable as the timing might be, will be any different.

While this deal won't add any immediate oomph to Covidien's consolidated results, it does, however, extend Covidien's market share in addressable colonoscopy. Not to mention, it presents an immediate area of collaboration since Covidien already has an endomechanical business. With Given's PillCam, which is seen as an improvement to conventional minimally invasive surgery (MIS), and its other devices, Covidien stands to gain share from market leaders Johnson & Johnson and Intuitive Surgical (ISRG - Get Report).

So despite its high price tag,  the acquisition might yield an immediate payoff. There is longer-term potential, too: the MIS market may still grow by at least 60% in the next several years.

All of that said, there are some risks here that management must address, not the least of which is the ongoing weakness in both the contrast products business and radiopharmaceuticals.

Management has done a great job offsetting these deficits with strong performance in areas including active pharmaceutical ingredients. But expectations have now been raised even higher. With the stock having posted such strong year-to-date gains, this new acquisition is certain to put a spotlight on the company's organic growth performance.

Until there is a meaningful sign of a slowdown, Covidien will remain a top favorite for medtech performers in 2014.

At the time of publication, the author held no position in any of the stocks mentioned.

This article was written by an independent contributor, separate from TheStreet's regular news coverage.