The $30-per-share price is a nearly 27% premium over Given Imaging’s $23.65 closing price Dec. 6, 2013, the last business day before the deal was announced.
Covidien said it expects the Given Imaging business to add $40 million to $50 million in "incremental" revenue each quarter. During fiscal 2014 the deal is expected to dilute earnings per share but have no effect on adjusted EPS, according to a press release, and accretive to both in fiscal 2015. The Mansfield, Mass.-based medical device giant did not alter its guidance for the deal, according to the release.
"Acquiring Given Imaging significantly expands Covidien’s GI solutions business and supports the company’s strategy to comprehensively address key global specialties and procedures," medical device president Bryan Hanson said in prepared remarks. "We are committed to providing clinicians with more accurate and efficient diagnostic technologies to help achieve better outcomes for patients."
Late last year Hanson estimated the GI market at $3 billion, making it "one of the most attractive specialty procedure areas." The PillCam is an endoscope in a capsule, swallowed by the patient and designed to deliver images during the 10 hours it spends traversing the GI tract.
A versions of the PillCam is cleared in the U.S. for imaging of the small bowel; another version, the PillCam Colon, won 510(k) clearance from the FDA earlier this month.