Covidien closes its $860M Given Imaging buyout

Given Imaging's endoscopic PillCam capsule--Courtesy of Given

Given Imaging's time as an independent company has come to a close. As expected, Irish medical device giant Covidien ($COV) has closed its $860 million buyout of the Israeli company known for its endoscopic PillCam capsules.

Covidien said the deal, which amounts to $30 per share, absorbs Given into its own GI solutions business, and it will be counted within Covidien's Advanced Surgical revenue arm during quarterly financials. What's more, Given will bring between $40 million and $50 million per quarter in incremental revenue to the company, though the M&A transaction itself will be dilutive to Covidien's earnings per share in fiscal 2014, Covidien said.

Covidien said that Given's tech now gives it one of the broadest selection of products "for visualizing, monitoring, and detecting abnormalities in the digestive system."

But what will become of Given President and CEO Homi Shamir, who helped propel the company into profitability and $50 million in quarterly revenue? Shamir was coy about that question in early February. He told us that he and Covidien were "in discussions," that "Covidien can be a great home" and that "their vision in the GI space is a very exciting vision."

Shamir could not be reached to comment on whether any deal had been reached. A Covidien spokesman told FierceMedicalDevices via email that "there is integration work underway that will give us a better understanding of the skills and expertise of the combined team. That will inform any decisions about organizational structure going forward." The spokesman added that there are no announcements yet in this area.

Covidien, meanwhile, said its guidance for the fiscal year remains the same. And with Given in hand, Covidien will move forward with its plans to embrace and build its presence in certain specialties, Bryan Hanson, group president of the company's Medical Devices and U.S. arm, said in a statement.

"Acquiring Given Imaging significantly expands Covidien's GI Solutions business and supports the company's strategy to comprehensively address key global specialties and procedures," Hanson said.

- read the release

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