Covidien buys ev3 for $2.6 billion

Drug and medical device maker Covidien is buying Minnesota-based medical device maker ev3 Inc. for $2.6 billion.  The deal is said to be designed to help Dublin, Ireland-based Covidien boost sales as it pursues its growth strategy in a bid to build a higher-margin, faster growing company. The deal, along with its separate agreement to sell its sleep-therapy business, is the latest in a number of acquisitions and divestitures made by Covidien since it spun off from Tyco International several years ago. Selling less-expensive medical products and capital equipment, the company has been less affected by the recession than some other companies in its sector. The acquisition will add ev3ÔÇÖs stents, angioplasty balloons, plaque removal systems and catheters to treat heart disease to CovidienÔÇÖs product rangeÔÇöwhich specializes in things like wound care, scalpels and products used during surgery. Commenting on the deal, Richard J. Meelia, chairman, president and CEO of Covidien, said: "The acquisition of ev3 will enable Covidien to significantly expand its presence in the vascular market and is in line with our strategy of becoming a leading partner with vascular surgeons, neurosurgeons, interventional cardiologists and interventional radiologists. ÔÇ£With its broad product portfolio, clinical expertise and call-point synergies with our existing vascular franchise, ev3 will be an important addition to our innovative vascular intervention products." Robert Palmisano, president and CEO of ev3, said: ÔÇ£We believe this transaction will provide truly unique opportunities and will create value for both companies' stockholders, patients and employees. We will be able to advance our broad platform of peripheral vascular and neurovascular technologies with a leading global healthcare products company that shares our vision of delivering breakthrough and innovative medical solutions for improved patient outcomes. ÔÇ£In addition, this combination will provide the opportunity for further innovation to support endovascular market growth and procedure penetration worldwide, while our employees will be afforded the opportunity to be part of a larger organization with greater depth of resources for sustained success in our industry." Covidien said it has no plans to move any of ev3ÔÇÖs operations out of Minnesota. Founded in 2000, Ev3 had 1,350 employees at the end of 2009. With 2009 revenue of $10.7 billion, Covidien has 42,000 employees worldwide in more than 60 countries. Its products are sold in over 140 countries.