Patient-monitoring products provider Covidien, Dublin, Ireland, has entered a definitive agreement to acquire respiratory care device manufacturer Oridion Systems Ltd, Jerusalem. The companies—which both have US headquarters in Massachusetts; Covidien in Mansfield and Oridion in Needham—recognize an opportunity to build on their complimentary product lines in order to push innovation in respiratory care applications.
Covidien currently produces patient-monitoring products and respiratory care devices that provide clinicians with methods of monitoring respiratory function. Oridion develops medical devices that monitor carbon dioxide in patient's exhaled breath, which is a key parameter used to assess ventilation, as well as being a leading indicator of respiratory distress or impairment. Oridion's Microstream capnography monitors and modules, for example, when combined with specialized algorithms and etCO2 breath sampling lines, monitor adequacy of ventilation and provide an early indication of airway compromise to make patient care safer and easier.
Together, the company's product portfolios will complement each other to enable them to provide new tools for health care providers to better track subtle, yet critical, variations in respiration rate, blood oxygen levels, pulse rate, and exhaled carbon dioxide. Tracking these types of data together is necessary in order to get a complete picture of a patient's status so that clinicians can address health complications sooner.
“The acquisition of Oridion Systems adds a key monitoring technology to the Covidien portfolio,” says Robert White, president, respiratory and monitoring solutions, Covidien. “Oridion's products and etCO2 technology are excellent complements to [Covidien's] current portfolio of pulse oximeters and monitoring products, enabling us to offer a complete portfolio of solutions to monitor respiratory function for patients around the world.”
The companies expect to complete the merger in the second calendar quarter of 2012. The boards of directors of both companies have unanimously approved the transaction, pursuant to which a wholly owned subsidiary of Covidien will pay $23.00 in cash per Oridion share for a total of approximately $300 million, net of cash acquired. The merger will be subject to the approval of Oridion's shareholders, customary closing conditions, and receipt of certain regulatory approvals.
Covidien currently has 41,000 employees in more than 65 countries and operates three business segments, including medical devices, medical supplies, and pharmaceuticals. With its products being sold in more than 140 countries, the company achieved revenue of $11.6 billion in 2011. By comparision, Oridion Systems' sales in 2011 reached $64 million. Upon completion of the transaction, Covidien will operate with the Oridion Systems business as part of its oximetry and monitoring product line in its medical devices unit. Covidien does not expect the acquisition to impact its fiscal 2012 sales, operating margin, or earnings per share.