Covidien announced late Saturday it will acquire Israel-based Given Imaging
, which manufacturers ingested gastrointestinal imaging pills, for $30 a share or $860 million.
The offer, which must be approved by Given shareholders, represents a 27% premium over company's closing share price of $23.65 on Friday.
“We believe GI is one of the most attractive specialty procedure areas,” the Mansfield, Mass.-based Covidien, which is headquartered in Dublin, Ireland, said in its announcement. “Acquiring Given will enable Covidien to significantly expand its presence in a $3 billion GI market.”
Given Imaging developed a camera-in-a-pill capable of visualizing, diagnosing and monitoring the digestive system. The 12-year-old technology represents a less invasive option than either endoscopy or colonoscopy, but hasn't gotten widespread acceptance in the market because it requires similar preparation for patients. The company now markets seven imaging systems for 21 separate GI conditions.
“The combination of Covidien's established global presence and Given Imaging's innovative capabilities has the potential to transform this market,” said Given CEO Homi Shamir. “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.”
Covidien, a leading medical device and hospital supplies manufacturer with $10.2 billion in sales in 2013, estimated acquiring Given will add about $160 million to $200 million in annual sales. The company's major lines of business include wound dressings and sanitary napkins in its medical supplies division and bedside respirators and their monitoring systems in its medical device division.