Ireland-based healthcare product maker Covidien Plc. (COV) has reportedly completed its acquisition of Endovascular devices maker ev3 Inc. (EVVV) for $2.6 billion. The companies signed the merger agreement on Jun 1, 2010. Moving forward, ev3 will report as a part of Covidien’s vascular products line in the medical devices segment.
Covidien made a tender offer on Jun 11, 2010, to acquire all the outstanding shares of eV3 for $22.50 each in cash. The company completed the offer on Jul 9 and tendered just over 100.8 million eV3 shares (or 87.7% of the outstanding shares). Covidien has funded the acquisition with cash in hand, commercial paper and bridge loan facility.
Since its announcement, the acquisition faced strong resistance from eV3 shareholders who filed a class action suit in the Delaware Chancery Court on Jun 22, 2010, in an attempt to block the transaction. However, eV3 recently made a settlement with the plaintiffs and made additional disclosures and certain amendments to the merger deal.
Covidien is a leading global healthcare products company that develops and markets medical solutions for better patient outcomes. The company’s core medical devices business faces stiff competition from Johnson & Johnson (JNJ), Becton Dickinson (BDX) and C.R. Bard (BCR).
Covidien boasts a well diversified product and technology portfolio. The company remains committed to rolling out new products and technologies, focusing on faster-growing products and markets, and boosting market share in core segments through investments in sales and marketing infrastructure.
With the acquisition of eV3, Covidien has emerged as a leading player in the endovascular devices market with a strong foothold in both the peripheral vascular and neurovascular sub-segments. eV3 provides Covidien a comprehensive suite of vascular intervention products. However, Covidien expects the acquisition to dilute its fiscal 2010 and fiscal 2011 adjusted earnings per share by 5 cents to 8 cents and 10 cents to 15 cents, respectively.
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