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Covidien (COV) Paying $680 Million for Camera-in-a-Pill Maker Given Imaging (GIVN)

By  +Follow December 9, 2013 7:38AM
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Medical device manufacturer Covidien plc (COV) said Sunday that it is buying medical technology company Given Imaging Ltd. (GIVN) in a transaction valued at $860 million to expand its gastrointestinal diagnostic business. The news came after three units of Nochi Dankner’s IDB group agreed Saturday to sell their positions in Given Imaging, although the name of the buyer was not disclosed.

Covidien, which is headquartered in Dublin, Ireland, said it will pay $30 per share for Israel-based Given, representing about a 27-percent premium to Friday’s closing price of $23.65 per share of GIVN. The boards of both companies have approved the acquisition, which is expected to close by the end of March 2014.

Capsule Endoscopy

Given Imaging is a pioneer in capsule endoscopy. The company has developed PillCam, an ingestible capsule containing a tiny camera that when swallowed allows clinicians to look inside, and monitor and diagnose the digestive system as an alternative to a traditional endoscopy. Given has been under pressure for nearly two years to sell itself, including investor Discovery Group urging the company in October to initiate a $50 million share buy-back plan and put itself on the auction block again, saying it is chronically undervalued because of poor management. At that time, Discovery Group, which owns about 4 percent of Given Imaging, thought the company could get an offer of up to $30 per share. Looks like it was right.

Covidien said that it will use cash on hand to fund the purchase. Given Imaging will report within the medical devices segment of Covidien and is expected to add between $40 million to $50 million per quarter in incremental revenue to the division. From profit and operating margin standpoints, the acquisition is not expected to be accretive until fiscal 2015.

A Strong Q3 for Given Imaging

During the third quarter ended September 30, Given Imaging generated $50 million in sales, up 10 percent from the year prior quarter. Adjusted earnings were $8.2 million, or 25 cents per share, up 4 percent from Q3 2012. Global PillCam sales increased 9 percent during the quarter to 63,500 capsules. Worldwide sales of GI diagnostics products improved by 15 percent to $15.3 million. By integrating the Given Imaging operations, Covidien will be able to leverage its global reach to further bolster sales of Given’s products.

“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, in a statement today.

“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,” added Homi Shamir, president and chief executive at Given Imaging Ltd.

Shares of GIVN jumped ahead to near the buyout price at the opening bell. Through Friday’s close, the stock price was up about 33 percent in 2013. Shares of COV, which were up 28 percent in 2013 through Friday, have inched up about half a percent in Monday morning action to $68.48.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions.


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Results for COV
Stocks in News
27 Aug 14 20:12:57
$COV: Mallinckrodt Nears Buy Point As Sales, Earnings Rise http://t.co/2duIUI4ee4 http://t.co/1u7WJRW9qV
medtech[y]
27 Aug 14 19:30:15
Flashback thread going strong: Great conversation on PillCam and their acquisition by @Covidien |http://t.co/bJwR8FJjLY @GivenImaging $COV
Stock Signaling
27 Aug 14 17:01:06
After Hours Volume Leaders: $CENX $JPM $PGR $IG $WDAY $WSM $BBY $T $TQNT $RFMD $COV $CMCSA $HPQ $ARUN $APC http://t.co/Vtx6dLy0Nw #analytics
US Banking News
27 Aug 14 16:23:11
Insider Buying: Coleman N. Lannum III Purchases 1,736 Shares of Covidien plc Stock $COV http://t.co/TBbtKAe4Dx
Sleek Money
27 Aug 14 16:14:33
Insider Buying: Coleman N. Lannum III Purchases 1,736 Shares of Covidien plc Stock $COV http://t.co/NkNrTSteNO
Harry Walkman
27 Aug 14 15:00:35
$COV More Obstacles Erected For The Covidien-Medtronic Merger http://t.co/Fwu50c6rch
Business Updates
27 Aug 14 13:13:14
$COV: Company Update: Covidien plc (NYSE:COV) – Covidien Opens Advanced ... http://t.co/DQRqUZ4uVC http://t.co/MnklyXG4AI
InsiderReports
27 Aug 14 13:03:55
Insider buying $COV (Covidien plc) shares for 105,000$. http://t.co/gBxvXEBOSL
Bidness Etc
27 Aug 14 12:04:53
More Obstacles Erected For The #Covidien-#Medtronic Merger http://t.co/kDoYVm5k2y $COV $MDT
Seeking Alpha
27 Aug 14 10:43:25
MedTech Defies Sequestration, M&As Steal The Show http://t.co/SMQ8Wldvkm $ZMH $MDT $COV $SYK $SNN
Todd Fronek
27 Aug 14 10:38:21
A look at recent MN mergers involving IP. $MDT $COV #iplawmn http://t.co/sOiJKBw9ZO
Zettacap
27 Aug 14 10:22:38
Zettacap lowest rated financial companies $BIIB, $WLP, $PRGO, $COV, $REGN for 8/27/24, #bigdata, #sp500, #fintech, #healthcare, #stocks
Scott Spencer
27 Aug 14 09:15:00
RT @LizEPVantage: $MDT is buying both big and small. The Sapiens acquisition cost 215 times less than $COV, but it's still important http:/…
Business Updates
27 Aug 14 09:12:59
$COV: Company Update: Covidien plc (NYSE:COV) – Covidien Opens Advanced ... http://t.co/DQRqUZ4uVC http://t.co/nx6CQ78eY7
Scott Spencer
27 Aug 14 09:08:45
@DrPaulyDeSantis $MNK one of the largest biotech tax inversions, a successful $COV spin-off with Questcor acquisition http://t.co/POfLBdoGg4
Qmed
27 Aug 14 08:55:26
Medtronic inks some smaller acquisition deals—"smaller" as in only tens or hundreds of millions of dollars http://t.co/4en0IKaHaF $MDT $COV
MedTechWorld
27 Aug 14 08:55:13
Medtronic inks some smaller acquisition deals—"smaller" as in only tens or hundreds of millions of dollars http://t.co/yeEThlp77c $MDT $COV
MedTechWorld
27 Aug 14 08:47:01
Medtronic inks some smaller acquisition deals—"smaller" as in only tens or hundreds of millions of dollars http://t.co/tJ6FQJn5pQ $MDT $COV
Qmed
27 Aug 14 08:47:01
Medtronic inks some smaller acquisition deals—"smaller" as in only tens or hundreds of millions of dollars http://t.co/dR0cpNQ1D3 $MDT $COV
EP Vantage
27 Aug 14 08:20:02
RT @LizEPVantage: $MDT is buying both big and small. The Sapiens acquisition cost 215 times less than $COV, but it's still important http:/…
Jon Gardner
27 Aug 14 08:19:25
RT @LizEPVantage: $MDT is buying both big and small. The Sapiens acquisition cost 215 times less than $COV, but it's still important http:/…
Elizabeth Cairns
27 Aug 14 08:15:46
$MDT is buying both big and small. The Sapiens acquisition cost 215 times less than $COV, but it's still important http://t.co/LZQM6zsHFE
Market Int Center
27 Aug 14 07:34:33
Potential Covidien $COV Trade Targets 2.98% Return ( http://t.co/MpcewtjQbl )
Covidien IR
27 Aug 14 06:24:46
$MDT S-4 (Proxy) filing amendment 1... $COV - http://t.co/M0sp8oqXvW
Stock Market News
27 Aug 14 06:12:42
$COV: Insider Buying: Coleman N. Lannum III Acquires 1720 Shares of Covidien plc ... http://t.co/t4DkqXbwWk http://t.co/kDZpT56fKc
Tim Brennan
27 Aug 14 05:47:39
Expected Range Compression Scan for 8/27/2014 (Bullish) - $AGN $VRX $COV $MON $APA http://t.co/M0NsWx7Bfj
Polyticks
27 Aug 14 03:43:23
RT @Richard_WSPB: Intuitive Surgical Is a High-Risk Stock Delivering Little Reward http://t.co/CPyHdlo4Ow via @TheStreet $ISRG $JNJ $BSX $C…
TalkMarkets
27 Aug 14 03:39:24
Vive La France! $COV $DGRLY $FBASF $CZZ $AGU $ABX $ALKS $NVS $GSK $BNS $CIFAF $PT http://t.co/Re4G1Lz6rO
Richard Saintvilus
27 Aug 14 03:11:30
Intuitive Surgical Is a High-Risk Stock Delivering Little Reward http://t.co/CPyHdlo4Ow via @TheStreet $ISRG $JNJ $BSX $COV $MDT
Werner R. Kranenburg
27 Aug 14 03:07:05
$SLXP shareholder challenges $COPN #inversion deal on private #tax consequences http://t.co/GW7cOqZSdK $COV $MDT $FRX http://t.co/hM2Ic9DqIq
medtech[y]
27 Aug 14 02:00:10
Flashback thread going strong: Great conversation on PillCam and their acquisition by @Covidien |http://t.co/Tj184LHt32 @GivenImaging $COV
Business Updates
26 Aug 14 18:12:45
$COV: Covidien plc VP Buys $359078 in Stock (COV) http://t.co/2wyU6pIc62 http://t.co/S6VuOdWuPk
medtech[y]
26 Aug 14 18:00:11
Flashback thread going strong: Great conversation on PillCam and their acquisition by @Covidien |http://t.co/fDQbz01805 @GivenImaging $COV
Richard McLaurin
26 Aug 14 15:44:58
RT @LifeSciencesMkt: Its money making like this via John Boehner on $COV $MDT stock trading that says inversions here to stay http://t.co/u…
medtech[y]
26 Aug 14 12:00:55
Flashback thread going strong: Great conversation on PillCam and their acquisition by @Covidien. |http://t.co/8e67Lid5u3 @GivenImaging $COV
Laidlaw Global Ltd
26 Aug 14 11:37:17
RT @MedTechWorld: Covidien Acquires Vascular Firm ahead of Medtronic Merger http://t.co/WP1WuiYO4k #meddevice #medtech $COV $MDT
NASDAQ
26 Aug 14 11:37:04
$COV - Filing of Certain Prospectuses and Communications in Connection With Business Combination Transactions http://t.co/QWvau2HA0M
Thomas Collins
26 Aug 14 11:30:47
$COV Covidien plc Given Consensus Recommendation of "Hold" by Brokerages ... http://t.co/KpBBTxcFU3
Jack Trader
26 Aug 14 11:30:47
$COV Medtronic Shareholders Against Covidien Acquisition http://t.co/HsN9zCIUYR
Financial Updates
26 Aug 14 11:12:44
$COV: [$$] Medtronic's Tax Inversion Lesson http://t.co/gMA5eseTuX http://t.co/Js2qkKc5Mz
Chris Newmarker
26 Aug 14 10:56:41
RT @QmedNews: Covidien Acquires Vascular Firm ahead of Medtronic Merger http://t.co/2JjMmOxBgn #meddevice #medtech $COV $MDT
MedTechWorld
26 Aug 14 10:41:58
Covidien Acquires Vascular Firm ahead of Medtronic Merger http://t.co/WP1WuiYO4k #meddevice #medtech $COV $MDT
Qmed
26 Aug 14 10:41:58
Covidien Acquires Vascular Firm ahead of Medtronic Merger http://t.co/2JjMmOxBgn #meddevice #medtech $COV $MDT
LifeSciencesMkt
26 Aug 14 10:41:27
Its money making like this via John Boehner on $COV $MDT stock trading that says inversions here to stay http://t.co/u6v6uTP4kP
LifeSciencesMkt
26 Aug 14 10:37:53
Now NO inversion fix makes sense > Boehner, Camp Profit From Corp. Bid to Avoid U.S. Tax http://t.co/bBBZgmNQ5v via @BloombergNews $MDT $COV
Seeking Alpha
26 Aug 14 08:17:14
Insider Buys And Sells- Priceline, Southern Copper Corp. http://t.co/4rFtMGPF3z $SCCO $IVAC $GNC $ZFC $COV $PCLN $JNPR $ICPT $JAH $BKD
Nicholas Grambas
26 Aug 14 07:40:32
RT @SeekingAlpha: John Paulson's Big Q2 Buys http://t.co/L4s1ybz5K4 $ABBV $AGN $CIE $COV $DG $DTV $FDO $HSH $MDT $MNK $QCOR $SHPG $T $TEF $…
Seeking Alpha
26 Aug 14 07:40:03
John Paulson's Big Q2 Buys http://t.co/L4s1ybz5K4 $ABBV $AGN $CIE $COV $DG $DTV $FDO $HSH $MDT $MNK $QCOR $SHPG $T $TEF $TI $TSN $TSU
BV Healthcare
26 Aug 14 05:13:22
$COV Announcement under Irish Takeover Rules Relevant Securities in Issue – August 26, 2014.. http://t.co/iOTjurTAwk
Business Headlines
26 Aug 14 05:12:51
$COV: Allergan Inc. (AGN), DIRECTV (DTV), Covidien plc (COV): Paulson & Co's New ... http://t.co/jRawXIi2lZ http://t.co/iL1JLXGvnK
				
				
By  +Follow December 9, 2013 7:38AM
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