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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
Bidness Etc
30 Sep 14 05:41:36
Medtronic, Inc. $MDT is expected to renegotiate the terms of its $43 billion acquisition deal with Covidien plc $COV http://t.co/whLSRSacf2
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30 Sep 14 04:01:19
$COV - Survey Shows 43 Percent of Americans Ages 40 and Older Have Experienced Symptoms of Peripheral Arterial http://t.co/NGCCEsdjmg
BV Healthcare
30 Sep 14 04:00:28
$COV Survey Shows 43 Percent of Americans Ages 40 and Older Have Experienced Symptoms of Peripheral Ar.. http://t.co/rzGuD2G7zU
Точка Входа.Трейдинг
30 Sep 14 02:45:04
Идеи short / / $WUBA $KORS $WAG $ALB $TRIP $HLF $YELP $COV.. http://t.co/Px4Utbavkp
WallStreet
29 Sep 14 11:40:51
$COV, $ESPR, $SKY - Shareholders Alert: Covidien (COV), Esperion Therapeutics (ESPR), Skyline (SKY) - http://t.co/rWw5uIKldr
WallStreet
29 Sep 14 11:36:44
$MDT, $COV - Medtronic, Inc. (NYSE:MDT) to Renegotiate its Deal for Buying Covidien Plc (NYSE:COV) - http://t.co/NOhmiZiH7T
Ben Silverberg
29 Sep 14 11:19:39
Into Bollinger Band Squeeze, on watch for directional clue $HBI $COV $CELG $PVTB $CP $CAH $KR $TFM $VEEV $JAH $SPR
Elyzabeth Ramirez
29 Sep 14 10:45:08
RT @FierceMedDev: Medtronic may revise $42.9B deal with Covidien under new tax rules http://t.co/j7LO9E32H0 $MDT $COV by @EmilyWFierce
Stacy Lawrence
29 Sep 14 10:35:08
RT @FierceMedDev: Medtronic may revise $42.9B deal with Covidien under new tax rules http://t.co/j7LO9E32H0 $MDT $COV by @EmilyWFierce
Pristine Trading
29 Sep 14 09:01:02
$COV looking to put in a lower high on the daily chart. We'll see if it gets some mom
Peter Coffaro
29 Sep 14 07:57:14
New U.S. tax rules may lead Medtronic to redo #inversion deal http://t.co/RYkx4vJELv $MDT $COV #mergers #acquisitions #meddevice
Emily Wasserman
29 Sep 14 07:45:08
Medtronic may revise $42.9B deal with Covidien under new tax rules: http://t.co/mlUClrYyFF $MDT $COV #Inversion
LTEN
29 Sep 14 07:42:45
RT @FierceMedDev: Medtronic may revise $42.9B deal with Covidien under new tax rules http://t.co/j7LO9E32H0 $MDT $COV by @EmilyWFierce
FierceMedicalDevices
29 Sep 14 07:41:40
Medtronic may revise $42.9B deal with Covidien under new tax rules http://t.co/j7LO9E32H0 $MDT $COV by @EmilyWFierce
Geoff DaCosta
29 Sep 14 07:41:17
$MDT, to $COV: I wonder if the return policy is like Nordstrom and no questions asked? http://t.co/8I4q7kERje
Media Sentiment
29 Sep 14 06:37:07
$COV received a new alert. Find out why at http://t.co/5udYd0Ofs6 #stocks #daytrading #trading #mkt #NYSE #NASDAQ #markets 169
Market Int Center
29 Sep 14 06:35:04
Covidien $COV Showing Bullish Technicals With Support At $87.61 ( http://t.co/1dq7bi6uUb )
medtech[y]
29 Sep 14 06:33:07
Covidien was the second most active device board last week |http://t.co/xyzos5XTaM @CovidienEnergy @covidien $COV
Ryan Sellers
29 Sep 14 05:58:09
RT @OpenOutcrier: New U.S. tax rules may lead Medtronic to redo inversion deal $MDT $COV http://t.co/wpgxxF6vVf
Open Outcrier
29 Sep 14 05:56:26
New U.S. tax rules may lead Medtronic to redo inversion deal $MDT $COV http://t.co/wpgxxF6vVf
Don Seiffert
29 Sep 14 05:23:04
BBJ Live: Fallout from the U.S. Treasury crackdown on tax inversions $COV $SHPG http://t.co/KCaQpz1bUD
Risk Arb OFI
28 Sep 14 23:52:05
Reuters says Medtronic likely to try to renegotiate the structure and terms of its $49.2bn deal to buy Covidien $MDT $COV
stt2318
28 Sep 14 09:51:48
$COV long setup http://t.co/5CQL0ZZlIH
OptionSamurai
28 Sep 14 04:36:31
Looking for dividend capture w/ options on $JPM $ACN $VZ $TK $COV $TRN & $CSCO The divs are in the coming 2 weeks, before earnings #options
Carmen Hill
27 Sep 14 12:48:33
$COV outlines up-to-date 110600 of accumulation distribution: http://t.co/3tNkySKUrQ
The Fly
26 Sep 14 13:55:16
$AAPL $NKE $CLX $AZN $PFE $ABBV $SHPG $MDT $COV $YHOO $AOL $BBRY $BBBY $MU $KMX $HAS $DIS $MAT Market ends wee... http://t.co/uEu7ixXprv
avo
26 Sep 14 08:16:31
Currently riding the $COV breakout...$SPY further downside may be ahead
Mahmud Pirimov
26 Sep 14 06:55:46
RT @davidfaber: Early verdict on Treasury's move on inversions is that it is more harsh and severe than expected. $MDT, $COV, $ABBV, $SHP.
Irma Doucet
26 Sep 14 06:31:58
$COV Covidien plc to Report Fourth-Quarter and Fiscal 2014 Results on November 5 ... http://t.co/sVa21tTNUp
Analyst Ratings
25 Sep 14 15:49:18
Get the latest ratings for $COV $TRW $ABC $ALGT $HMA in your inbox with ARN Daily http://t.co/nSJuDsYidj
Alex Brill
25 Sep 14 15:44:56
Inversion Crackdown Dodges Real Job Opportunities http://t.co/zaFuPcwfZH $BKW $COV $MDT $MYL $SN $ATLN $ABBV $SHP
Emory Redd
25 Sep 14 08:44:02
Hedge Funds Get Jostled by Inversions' Jiggles - WSJ http://t.co/mgYTAy0m4c $SHPG $MYL $MDT $COV $ABBV
Bidness Etc
25 Sep 14 06:27:06
Bidness Etc takes a look at how new rules will influence impending inversion schemes - http://t.co/zGftwUol0B $MDT $ABBV $COV $SHPG
MarketCurrents
25 Sep 14 06:05:38
Covidien to report on November 5 http://t.co/eDekLERrYy #premarket $COV
The Fly
25 Sep 14 05:52:02
$MDT $COV Medtronic deal for Covidien still attractive despite new rules, says Bernstein: Full Story http://t.co/0TthHXN1Mq
Myrollingstocks
25 Sep 14 05:05:22
What about this $COV http://t.co/7aJMV2bTLy
Stock Moo
25 Sep 14 04:45:24
$cov: Covidien plc to Report Fourth-Quarter and Fiscal 2014 Results on November 5, 2014 http://t.co/wJKMDqne7s
mHealth Reporter
25 Sep 14 04:05:18
RT @BV_Healthcare: $COV Covidien plc to Report Fourth-Quarter and Fiscal 2014 Results on November 5, 2014.. http://t.co/IaPvhODgQ3
NASDAQ
25 Sep 14 04:01:32
$COV - Covidien plc to Report Fourth-Quarter and Fiscal 2014 Results on November 5, 2014 http://t.co/RgvI5UynrD
BV Healthcare
25 Sep 14 04:00:50
$COV Covidien plc to Report Fourth-Quarter and Fiscal 2014 Results on November 5, 2014.. http://t.co/IaPvhODgQ3
Stock Signaling
24 Sep 14 16:01:21
After Hours Price Advances: $COV $HAWK $FXEN $ISR $HTCH $MNI $MM $EGY $JAKK $EXK $CPB $NPSP $REXX $VEEV $CCG http://t.co/Vtx6dLy0Nw #trading
Don Seiffert
24 Sep 14 13:47:56
BBJ Live: Fallout from the U.S. Treasury crackdown on tax inversions $COV $SHPG $MDT $ABBV http://t.co/KCaQpz1bUD
Daily Contracts
24 Sep 14 13:35:52
$COV News: 2007 Stock And Incentive Plan http://t.co/jpb8mxgUM6 #newyork #incentiveplan
Crazy Coyote Cafe
24 Sep 14 12:35:42
RT @CNBCFastMoney: 3 hot health-care stocks: Pro http://t.co/IJciYprVkg $XLV $MDT $COV $SAN $TRNX
Jahi Faucette
24 Sep 14 12:27:52
RT @CNBCFastMoney: 3 hot health-care stocks: Pro http://t.co/IJciYprVkg $XLV $MDT $COV $SAN $TRNX
Daily Contracts
24 Sep 14 12:21:52
$COV News: 2007 Stock And Incentive Plan http://t.co/vXTp4gMLL3 #newyork #incentiveplan
Investing Philosophy
24 Sep 14 12:21:27
RT @CNBCFastMoney: 3 hot health-care stocks: Pro http://t.co/IJciYprVkg $XLV $MDT $COV $SAN $TRNX
XBanker Trader Guyer
24 Sep 14 12:14:38
RT @CNBCFastMoney: 3 hot health-care stocks: Pro http://t.co/IJciYprVkg $XLV $MDT $COV $SAN $TRNX
CNBC's Fast Money
24 Sep 14 12:14:16
3 hot health-care stocks: Pro http://t.co/IJciYprVkg $XLV $MDT $COV $SAN $TRNX
Bruno J. Navarro
24 Sep 14 12:14:08
3 hot health-care stocks: Pro http://t.co/j2GAq3rpAn $XLV $MDT $COV $SAN $TRNX
				
				
By  +Follow December 9, 2013 7:38AM
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