September 17, 2014 by Brian Johnson
The $43 billion acquisition of Covidien by Medtronic flunks M&A 101, but looking at the deal by the book is the wrong way to think about it, a senior Medtronic executive said yesterday. That’s because, on the surface, there are few synergies to cover the premium on the deal, according to Chris Cleary, Medtronic’s vice president of corporate development.
“There’s very little overlap,” Cleary told an audience of medtech executives in Albany, N.Y. yesterday. “The very thing that makes it an approvable transaction by most of the regulatory agencies makes it challenging, because 1 of things you learn in M&A 101 is that the premium you pay has to be covered by the synergies realized over time. On a net present basis, you have to get your money back over a reasonable period of time, and if there are no synergies than that’s really tough. Which turned out to be a horrible way to think about the deal.” Read more
September 18, 2014 by Arezu Sarvestani
Covidien and Medtronic continue to make progress on their pending mega-merger, now planning to host the 1st of 4 Integration Summits to discuss how to navigate a “smooth, seamless integration” between the companies.
The 1st summit is scheduled for September 25th and 26th, where leaders from both companies will meet to discuss each of the business divisions post-merger. Read more
September 19, 2014 by Arezu Sarvestani
Health information technology company Cerner announced this week that it won federal approval to move forward with its proposed $1.3 billion acquisition of Siemens Healthcare’s information technology business.
Cerner is throwing down straight cash for the deal, which was rumored in July and then confirmed in August. The companies still have other regulatory obstacles to pass before closing the deal. Read more
September 23, 2014 by Arezu Sarvestani
Diagnostics giant Alere has seen some major Wall Street action since news broke that former CEO Ron Zwanziger is looking to take the company private in a deal valued at $3.82 billion.
The offer has gotten the attention of shareholders as well as of former SEC attorney Willie Briscoe and the securities litigation firm of Powers Taylor, LLP. Read more
September 23, 2014 by Brad Perriello
The U.S. Treasury Dept. yesterday moved to stop so-called “inversion” deals like the pending $43 billion merger of Medtronic and Covidien, in which a U.S. company buys a foreign firm and shifts its incorporation overseas to gain tax-free access to foreign cash.
“These first, targeted steps make substantial progress in constraining the creative techniques used to avoid U.S. taxes, both in terms of meaningfully reducing the economic benefits of inversions after the fact, and when possible, stopping them altogether,” Treasury Secretary Jacob Lew said in prepared remarks. “While comprehensive business tax reform that includes specific anti-inversion provisions is the best way to address the recent surge of inversions, we cannot wait to address this problem. Treasury will continue to review a broad range of authorities for further anti-inversion measures as part of our continued work to close loopholes that allow some taxpayers to avoid paying their fair share.” Read more