Covidien plc has announced that it has completed the sale of its Confluent Surgical product line to Integra LifeSciences Corporation for approximately $235 million in cash. In addition, Covidien may receive up to an additional $30 million, contingent upon the achievement of certain performance measures related to the transition of the Confluent Surgical product line to Integra.
We first reported the news that Covidien was to ship its Confluent Surgical business off to Integra last October, and today’s news is confirmation that the deed has been done. We said at the time that the addition of a dural sealant technology to Integra’s line is completely sensible and will complement its Duragen® dural substitute. Duraseal fits well, enabling the surgeon to adopt a one stop shop approach to closing the Dura Mater following neurosurgical procedures.
Covidien is presumably happy to lose what could have been a broad product platform, but which failed to deliver a successful outcome in its lung sealant guise, being withdrawn from global markets following disappointing pivotal trial outcomes.
Given the revenue that was coming from its Duraseal line, its not surprising that the disposal will see Covidien expecting this transaction to be several cents dilutive to fiscal 2014 earnings per share. Having said which, the company does not anticipate this transaction will have a material impact on its fiscal 2014 outlook.
And at least, with the completion of this transaction, Covidien will be better able to focus resources on its global strategic priorities. Integra meanwhile must be pretty thrilled, so its a win-win.
Source: Covidien plc.