- Advances Covidien strategy to more
comprehensively address key specialties and procedures
globally
- Adds Given Imaging’s broad suite of
minimally invasive gastrointestinal diagnostic and monitoring
solutions
- Accelerates development of world-class
gastrointestinal portfolio focused on serving patient from
diagnosis to treatment
- Accretive to earnings per share
beginning in fiscal 2015
Covidien plc (NYSE: COV) and Given Imaging Ltd. (Nasdaq: GIVN)
today announced a definitive agreement under which Covidien will
acquire all of the outstanding shares of Given Imaging for $30.00
per share in cash, for a total of approximately $860 million, net
of cash and investments acquired. This transaction provides
Covidien additional scale and scope to serve the multibillion
dollar global gastrointestinal (GI) market and supports the
Company’s strategy to comprehensively address key global
specialties and procedures.
Given Imaging provides one of the broadest technology platforms
for visualizing, diagnosing and monitoring the digestive system,
including its flagship PillCam®, an innovative swallowed capsule
endoscope.
“We believe GI is one of the most attractive specialty procedure
areas. Acquiring Given will enable Covidien to significantly expand
its presence in a $3 billion GI market,” said Bryan Hanson, Group
President, Medical Devices & U.S., Covidien. “Adding Given’s
portfolio of diagnostics to our portfolio accelerates Covidien’s
strategy of providing physicians with products that support the
patient along the care continuum from diagnosis to treatment. It
also confirms our leadership in developing less-invasive screening,
diagnosis and treatment solutions that can improve patient outcomes
and lower healthcare costs.”
“Given Imaging revolutionized GI diagnostics over 12 years ago
with the launch of PillCam and created an entirely new diagnostic
category -- capsule endoscopy. The combination of Covidien’s
established global presence and Given Imaging’s innovative
capabilities has the potential to transform this market,” said Homi
Shamir, President and CEO, Given Imaging Ltd. “After thoroughly
evaluating our strategic options we determined that this
transaction is in the best interests of Given Imaging, its
shareholders and employees and provides unique benefits to patients
globally.”
Given Imaging is dedicated to developing innovative diagnostic
and monitoring technologies for the digestive system. The company’s
broad portfolio includes the PillCam, a minimally-invasive,
non-sedation, swallowed optical endoscopy technology for the small
bowel, esophagus and colon. In total, Given Imaging has seven
product lines across 21 GI disease states. The company also offers
industry-leading GI functional diagnostic solutions including
ManoScan® high resolution manometry, Bravo® capsule-based pH
monitoring, Digitrapper® pH-Z monitoring and SmartPill® motility
monitoring systems.
The transaction is subject to customary closing conditions,
including Given Imaging shareholder approval and the receipt of
certain regulatory approvals, and is expected to be completed by
March 31, 2014. The Boards of Directors of both companies have
approved the transaction, and the Boards of Directors of DIC, Elron
and Rdc, owners of 44 percent of Given's outstanding shares, have
approved voting in favor of the transaction. DIC has also entered
into a customary voting agreement with Covidien.
Financial Highlights
Covidien intends to finance the transaction through cash on hand
and will report Given Imaging within the Medical Devices business
segment. Upon closing of the transaction, Covidien expects Given
Imaging will add between $40 and $50 million per quarter in
incremental revenue to the Medical Devices segment.
On a reported U.S. GAAP basis, the transaction is expected to be
dilutive to both operating margin and earnings per share (EPS) in
fiscal 2014. On an adjusted basis, excluding one-time items and
transaction costs, management expects the transaction to be
neutral to both operating margin and EPS in fiscal 2014. The
transaction is expected to be accretive to operating margin and EPS
both on a U.S. GAAP and on an adjusted basis in fiscal 2015 and
beyond. From a “cash earnings” standpoint, which excludes the
impact of amortization, the transaction is expected to be accretive
immediately after it closes.
Covidien management is not changing any of its guidance as a
result of this transaction.
Supporting materials are now available on the Investor Relations
section of Covidien’s website: http://investor.covidien.com
About Covidien
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 develops, manufactures and sells a diverse range of
industry-leading medical device and supply products. With 2013
revenue of $10.2 billion, Covidien has more than 38,000 employees
worldwide in more than 70 countries, and its products are sold in
over 150 countries. Please visit www.covidien.com to learn more
about our business.
About Given Imaging
Since pioneering the field of capsule endoscopy in 2001, Given
Imaging has become a world leader in GI medical devices, offering
health care providers a range of innovative options for
visualizing, diagnosing and monitoring the digestive system. The
company offers a broad product portfolio including PillCam® capsule
endoscope for the small bowel, esophagus and colon. The company
also offers industry-leading GI functional diagnostic solutions
including ManoScan® high resolution manometry, Bravo® capsule-based
pH monitoring, Digitrapper® pH-Z monitoring, and SmartPill®
motility monitoring systems. Given Imaging is committed to
delivering breakthrough innovations to the GI community and
supporting its ongoing clinical needs. Given Imaging’s headquarters
are located in Yoqneam, Israel, with operating subsidiaries in the
United States, Germany, France, Japan, Australia, Vietnam, Hong
Kong and Brazil. For more information about Given Imaging, please
visit givenimaging.com.
COVIDIEN FORWARD-LOOKING STATEMENTS
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 Covidien 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 may not close on
schedule or at all; the risk of competing offers; the possibility
that various closing conditions for the transaction may not be
satisfied or waived, including that a governmental entity may
prohibit, delay or refuse to grant approval for the consummation of
the transaction; the ability to successfully integrate Given’s
operations with Covidien's and the time and resources required to
do so; the uncertainties inherent in commercial, research and
development activities; competitive developments and other risks
and uncertainties described in more detail in Covidien’s Annual
Report on Form 10-K for the fiscal year ended September 27, 2013
and Covidien’s subsequent filings with the SEC. We disclaim any
obligation to update these forward-looking statements other than as
required by law.
GIVEN IMAGING FORWARD-LOOKING STATEMENTS
This press release contains forward-looking statements within
the meaning of the "safe harbor" provisions of the U.S. Private
Securities Litigation Reform Act of 1995. These forward-looking
statements include, but are not limited to, statements about the
expected completion of the proposed transaction with Covidien and
the timing thereof, the satisfaction or waiver of any conditions to
the proposed transaction, anticipated benefits, growth
opportunities and other events relating to the proposed
transaction, projections about Given Imaging’s business and its
future revenues, expenses and profitability. Forward-looking
statements may be, but are not necessarily, identified by the use
of forward-looking terminology such as "may," "anticipates,"
"estimates," "expects," "intends," "plans," "believes," and words
and terms of similar substance. Forward-looking statements involve
known and unknown risks, uncertainties and other factors which may
cause the actual events, results, performance, circumstances or
achievements to be materially different from those expressed or
implied by such forward-looking statements. Factors that could
cause actual events, results, performance, circumstances or
achievements to differ from such forward-looking statements
include, but are not limited to, the following: (1) Given Imaging
may be unable to obtain shareholder approval as required for the
proposed transaction; (2) Given Imaging may be unable to obtain
required regulatory approvals or satisfy other conditions to the
closing of the proposed transaction; (3) the proposed transaction
may involve unexpected costs, liabilities or delays; (4) Given
Imaging’s business may suffer as a result of uncertainty
surrounding the proposed transaction and diversion of management
attention on transaction-related matters; (5) the outcome of any
legal proceedings related to the proposed transaction; (6) Given
Imaging may be adversely affected by other economic, business,
and/or competitive factors; (7) the occurrence of any event, change
or other circumstances that could give rise to the termination of
the merger agreement; (8) the ability to recognize benefits of the
proposed transaction; (9) risks that the proposed transaction
disrupts current plans and operations and the potential
difficulties in employee retention as a result of the proposed
transaction;(10) impact of the transaction on relationships with
customers, distributors and suppliers and (11) other risks to
consummation of the transaction, including the risk that the
transaction will not be consummated within the expected time period
or at all.
Factors that may affect the future events, results, performance,
circumstances or achievements of Given Imaging also include, but
are not limited to, the following: (1) Given Imaging’s ability to
develop and bring to market new products, (2) Given Imaging’s
ability to successfully complete any necessary or required clinical
studies with its products, (3) Given Imaging’s ability to receive
regulatory clearance or approval to market its products or changes
in regulatory environment, (4) Given Imaging’s success in
implementing its sales, marketing and manufacturing plans, (5) the
level of adoption of Given Imaging’s products by medical
practitioners, (6) the emergence of other products that may make
Given Imaging’s products obsolete, (7) lack of an appropriate bowel
preparation materials to be used with Given Imaging’s PillCam COLON
capsule, (8) protection and validity of patents and other
intellectual property rights, (9) the impact of currency exchange
rates, (10) the effect of competition by other companies, (11) the
outcome of significant litigation, (12) Given Imaging’s ability to
obtain reimbursement for its product from government and commercial
payors, (13) quarterly variations in operating results, (14) the
possibility of armed conflict or civil or military unrest in
Israel, (15) the impact of global economic conditions, (16) Given
Imaging’s ability to successfully integrate acquired businesses,
(17) changes and reforms in applicable healthcare laws and
regulations, (18) quality issues and adverse events related to
Given Imaging’s products, such as capsule retention, aspiration and
failure to attach or detach, bleeding or perforation that could
require Given Imaging to recall products and impact its sales and
net income, and (19) other risks and factors disclosed in Given
Imaging’s filings with the U.S. Securities and Exchange Commission
(the “SEC”), including, but not limited to, risks and factors
identified under such headings as "Risk Factors," "Cautionary
Language Regarding Forward-Looking Statements" and "Operating
Results and Financial Review and Prospects" in Given Imaging’s
Annual Report on Form 20-F for the year ended December 31, 2012.
You are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date of this
press release. Except to the extent expressly required under
applicable law, Given Imaging undertakes no obligation to release
publicly any revisions to any forward-looking statements, to report
events or to report the occurrence of unanticipated events.
ADDITIONAL INFORMATION
In connection with the proposed transaction, Given Imaging
intends to mail a proxy statement to its shareholders and furnish a
copy of the proxy statement with the SEC on Form 6-K. Shareholders
of Given Imaging are urged to read the proxy statement and the
other relevant material when they become available because they
will contain important information about Given Imaging, Covidien,
the proposed transaction and related matters. Shareholders are
urged to carefully read the proxy statement and other relevant
materials when they become available before making any voting or
investment decision with respect to the proposed transaction. The
proxy statement (when available) may be obtained for free at the
SEC's website at www.sec.gov. In addition, the proxy statement will
be available, without charge, at Given Imaging’s website at
www.givenimaging.com.
This press release is neither a solicitation of proxy, an offer
to purchase nor a solicitation of an offer to sell shares of Given
Imaging. Given Imaging, its executive officers and directors may be
deemed to be participants in the solicitation of proxies from
shareholders of Given Imaging in connection with the proposed
transaction. Information about those executive officers and
directors of Given Imaging and their ownership of Given Imaging
shares is set forth in Given Imaging’s proxy statement for its
special meeting of shareholders scheduled for December 31, 2013,
which was furnished to the SEC on Form 6-K on November 29, 2013.
Additional information regarding the interests of participants in
the solicitation of proxies in connection with the proposed
transaction will be included in the proxy statement that Given
Imaging intends to furnish to the SEC on Form 6-K.
Photos/Multimedia Gallery Available:
http://www.businesswire.com/multimedia/home/20131207005048/en/
CovidienPeter Lucht, Vice President, External Communications,
508-452-4168peter.lucht@covidien.comorCovidienMarguerite Copel,
Vice President, Communications,
203-821-4720marguerite.copel@covidien.comorCovidienColeman Lannum,
CFA, Vice President, Investor Relations,
508-452-4343cole.lannum@covidien.comorCovidienTodd Carpenter,
Senior Director, Investor Relations,
508-452-4363todd.carpenter@covidien.comORGiven ImagingLazar
PartnersDavid Carey, 212-867-1768 o646-239-6231
cdcarey@lazarpartners.comorGiven Imaging Israel Investor
ContactGelbart Kahana Investor RelationsNava Ladin,
+972-3-6074717nava@gk-biz.com
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