from the December 2013 issue

Covidien buys Given Imaging for $860m

Given Imaging CEO: After thoroughly evaluating our options we determined that this deal is in the best interests of Given Imaging.

Irish healthcare company Covidien plc (NYSE: COV) has acquired IDB Holding Corp. Ltd. (TASE:IDBH) unit capsule endoscope developer Given Imaging Ltd. (Nasdaq: GIVN; TASE: GIVN) for $860 million, net of cash and investments acquired. Covidien is paying $30 per share, a 15% premium on the share's closing price on Nasdaq on Friday night when the company had a market cap of $753 million.

IDB subsidiary Discount Investment Corporation (TASE: DISI) owns 14.7% of Given Imaging, subsidiary Elron Electronic Industries Ltd. (TASE: ELRN), owns 21.2%, including 8.3% through RDC, its joint venture with Rafael Advanced Defense Systems Ltd. in equal shares. Discount Investment said that it would make $142 million on the sale, Elron said that it would make $204 million, and RDC will make $80 million.

Covidien said, "This transaction provides Covidien additional scale and scope to serve the multibillion dollar global gastrointestinal (GI) market and supports the company's strategy to comprehensively address key global specialties and procedures. We believe Given Imaging 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"

Covidien added, "Given Imaging provides one of the broadest technology platforms for visualizing, diagnosing and monitoring the digestive system, including its flagship PillCam, an innovative swallowed capsule endoscope.

Covidien group president medical devices & US said, "Adding Given's portfolio of diagnostics to our portfolio accelerates Covidien's strategy of providing physicians with products that support the patient along the care continuum from diagnosis to treatment. It also confirms our leadership in developing less-invasive screening, diagnosis and treatment solutions that can improve patient outcomes and lower healthcare costs."

Given Imaging president and CEO Homi Shamir said, "Given Imaging revolutionized GI diagnostics over 12 years ago with the launch of PillCam and created an entirely new diagnostic category - capsule endoscopy. The combination of Covidien's established global presence and Given Imaging's innovative capabilities has the potential to transform this market. 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."

Reprinted from the Israel High-Tech & Investment Report December 2013

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