Moving decisively to accelerate a key component of its emerging markets
strategy, Covidien
plc (NYSE:COV) has completed two transactions – one in Brazil and the
other in China – that will enable it to help better meet the specific
needs of underserved ‘value segment’ markets. The value segment includes
markets with hospitals that primarily serve patients facing care
affordability challenges.
In Brazil, Covidien has acquired WEM Equipamentos Eletrônicos Ltda., a
privately held manufacturer of electrosurgical generators, disposables
and accessories based in Ribeirao Preto. In China, Covidien has entered
into a joint venture with the Changzhou Kangdi Medical Stapler Co.,
Ltd., a manufacturer of open stapler products based in Jiangsu Province.
Terms of the deals were not disclosed. Total impact on Covidien’s 2014
revenue and earnings is expected to be minimal, but each deal
establishes a presence for Covidien in segments of the Brazil and China
markets where the company currently has a limited footprint.
These underserved segments represent a strategic opportunity for
Covidien, as growth resulting from scaling these businesses is expected
to exceed that of the overall market over time. In addition to opening a
new growth segment to Covidien, the transactions support the company’s
vision to improve patient outcomes and expand global access to care.
“These deals accelerate our entry into an increasingly important
customer segment that we believe will enable us to grow above market
over time and increase access to affordable healthcare solutions,” said
Brian King, President, Emerging Markets, Covidien. “By combining
Covidien’s proven business model with the capabilities of our new
partners, we’ll be able to scale the value segment opportunity and help
provide more affordable healthcare solutions in new markets.”
Covidien has acquired all of WEM and will manage the business as part of
its Brazilian operations. Covidien and Kangdi will partner through a
shared ownership agreement with Covidien holding majority control and
will operate as a separate joint venture.
The transactions provide Covidien with capabilities such as lower cost
manufacturing, complementary channels and local brands to address the
different affordability needs of the value segment.
Covidien intends to leverage the two companies’ existing product
portfolios, manufacturing infrastructure, relationships and other
capabilities to provide cost-effective solutions specifically designed
for healthcare providers within the value segment. Covidien also plans
to integrate its existing tailored products portfolio into the channels
provided through these transactions.
About Covidien
Covidien is a leading global healthcare products company that creates
innovative medical solutions for better patient outcomes and delivers
value through clinical leadership and excellence. Covidien develops,
manufactures and sells a diverse range of industry-leading medical
device and supply products. With 2013 revenue of $10.2 billion, Covidien
has more than 38,000 employees worldwide in more than 70 countries, and
its products are sold in over 150 countries. Please visit www.covidien.com
to learn more about our business.
FORWARD-LOOKING STATEMENTS
Any statements contained in this communication that do not describe
historical facts may constitute forward-looking statements as that term
is defined in the Private Securities Litigation Reform Act of 1995. Any
forward-looking statements contained herein are based on our
management’s current beliefs and expectations, but are subject to a
number of risks, uncertainties and changes in circumstances, which may
cause actual results or Covidien actions to differ materially from what
is expressed or implied by these statements. The factors that could
cause actual future results to differ materially from current
expectations include, but are not limited to, the possibility that the
transaction may not close on schedule or at all; the risk of
competing offers; the possibility that various closing conditions for
the transaction may not be satisfied or waived, including that a
governmental entity may prohibit, delay or refuse to grant approval for
the consummation of the transaction; the ability to successfully
integrate Given’s operations with Covidien’s and the time and resources
required to do so; the uncertainties inherent in commercial, research
and development activities; competitive developments and other risks and
uncertainties described in more detail in Covidien’s Annual Report on
Form 10-K for the fiscal year ended September 27, 2013 and Covidien’s
subsequent filings with the SEC. We disclaim any obligation to update
these forward-looking statements other than as required by law.
Copyright Business Wire 2014