Medtronic has agreed to sell its Patient Care, Deep Vein Thrombosis, and Nutritional Insufficiency businesses, to Cardinal Health Inc. for $6.1Bn.
Medtronic plc tells us it has entered into a definitive agreement with Cardinal Health Inc. to sell its Patient Care, Deep Vein Thrombosis, and Nutritional Insufficiency businesses within the Patient Monitoring & Recovery (PMR) division of its Minimally Invasive Therapies Group (MITG). The products had arrived at Medtronic as part of its acquisition of Covidien, but their disposal has been seen as signalling a bit of rationalisation (or “disciplined portfolio management”) for the MedTech titan.
The transaction is expected to close in Medtronic’s second quarter of its fiscal year 2018, subject to receipt of customary regulatory approvals and closing conditions. Cardinal Health, already a distributor of some of the products is a global, integrated healthcare services and products company, providing customized solutions for hospitals, health systems, and other clinical entities worldwide.
Medtronic says the transaction is expected to result in an immediate positive impact to its comparable, constant currency revenue growth rate and non-GAAP comparable, constant currency operating margin of approximately 50 basis points each.
The deal will see Medtronic receive $6.1 billion in cash, subject to certain adjustments, with total after-tax proceeds estimated to be approximately $5.5 billion.
“This is a positive transaction for all involved – Medtronic, Cardinal Health, and our respective shareholders and employees – who we believe will all thrive under this change in ownership. In addition, it signifies our commitment to disciplined portfolio management,” said Omar Ishrak, Medtronic chairman and chief executive officer. “Medtronic has had a specific focus over the past several years on ensuring that we are delivering compelling clinical and economic value to health systems and patients around the world. Ultimately, we came to the conclusion that these products – while truly meaningful to patients in need – are best suited under ownership that can provide the investment and focus that these businesses require. At the same time, we can put these proceeds to work, investing over the long-term in higher returning internal and external opportunities that are more directly aligned with our growth strategies of therapy innovation, globalization, and economic value.”
“This transaction enables our group to better focus on a portfolio that delivers on our global strategic priorities,” said Bryan Hanson, executive vice president and president of Medtronic’s Minimally Invasive Therapies Group. “We believe both our employees and these businesses will thrive under Cardinal Health’s ownership. We sincerely appreciate the countless contributions of our team throughout the years, as well as the partnership and loyalty of our customers and patients.”
Source: Medtronic plc.