Covidien Announces Portfolio Management Activities

  • Definitive Agreement to Sell Sleep Therapy Product Line
  • Completion of Sale of U.S. Radiopharmacies

DUBLIN--()--Covidien (NYSE: COV), a leading global provider of healthcare products, today announced a definitive agreement to sell its Sleep Therapy continuous positive airway pressure (CPAP) and Bi-level products to PH Invest, a privately held company located in Luxembourg.

PH Invest will acquire the CPAP and Bi-level products, including the Nancy, France manufacturing facility, as well as related commercial operations in Europe. Several products, which are sold under the GoodKnight™ and Sandman™ brands, are included in this agreement. The agreement excludes the sleep interface products sold and marketed under the brand names Adam™, Breeze™ and Dreamfit™, which will continue to be sold by Covidien. Financial terms of this transaction were not disclosed.

This transaction, which is subject to customary closing conditions, is expected to be completed in the next 90 days and is not expected to have a material effect on operating income or earnings per share for 2010 or 2011.

In addition, Covidien has completed the previously announced sale of its radiopharmacies in the United States to Triad Isotopes, Inc. of Orlando, FL. Financial terms of that transaction were not disclosed.

Covidien’s radiopharmacy net sales were $91 million in the first six months of fiscal 2010. This transaction is not expected to have a material effect on Covidien’s operating income or earnings per share for fiscal 2010 or 2011.

The decision to divest these product lines was made following a thorough review and evaluation of a number of strategic alternatives. The decision is consistent with Covidien’s strategy to streamline its portfolio and reallocate resources to its faster-growing, higher-margin businesses, where the Company has, or can develop, a global competitive advantage.

ABOUT COVIDIEN

Covidien is a leading global healthcare products company that creates innovative medical solutions for better patient outcomes and delivers value through clinical leadership and excellence. Covidien manufactures, distributes and services a diverse range of industry-leading product lines in three segments: Medical Devices, Pharmaceuticals and Medical Supplies. With 2009 revenue of $10.7 billion, Covidien has 42,000 employees worldwide in more than 60 countries, and its products are sold in over 140 countries. Please visit www.covidien.com to learn more about our business.

FORWARD-LOOKING STATEMENTS

Any statements contained in this communication that do not describe historical facts may constitute forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Any forward-looking statements contained herein are based on our management’s current beliefs and expectations, but are subject to a number of risks, uncertainties and changes in circumstances, which may cause actual results or Company actions to differ materially from what is expressed or implied by these statements. The factors that could cause actual future results to differ materially from current expectations include, but are not limited to, the possibility that the sleep therapy transaction will not close or that the closing may be delayed, our ability to effectively introduce and market new products or keep pace with advances in technology, the reimbursement practices of a small number of large public and private insurers, cost-containment efforts of customers, purchasing groups, third-party payors and governmental organizations, intellectual property rights disputes, complex and costly regulation, including healthcare fraud and abuse regulations, manufacturing or supply chain problems or disruptions, rising commodity costs, recalls or safety alerts and negative publicity relating to Covidien or its products, product liability losses and other litigation liability, including legacy Tyco-related litigation, divestitures of some of our businesses or product lines, our ability to execute strategic acquisitions of, investments in or alliances with other companies and businesses, competition, risks associated with doing business outside of the United States, foreign currency exchange rates or potential environmental liabilities. These and other factors are identified and described in more detail in our filings with the SEC. We disclaim any obligation to update these forward-looking statements other than as required by law.

Contacts

Covidien
Eric Kraus, 508-261-8305
Senior Vice President
Communications
eric.kraus@covidien.com
or
Bruce Farmer, 508-452-4372
Vice President
Public Relations
bruce.farmer@covidien.com
or
Coleman Lannum, CFA, 508-452-4343
Vice President
Investor Relations
cole.lannum@covidien.com
or
Brian Nameth, 508-452-4363
Director
Investor Relations
brian.nameth@covidien.com

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Contacts

Covidien
Eric Kraus, 508-261-8305
Senior Vice President
Communications
eric.kraus@covidien.com
or
Bruce Farmer, 508-452-4372
Vice President
Public Relations
bruce.farmer@covidien.com
or
Coleman Lannum, CFA, 508-452-4343
Vice President
Investor Relations
cole.lannum@covidien.com
or
Brian Nameth, 508-452-4363
Director
Investor Relations
brian.nameth@covidien.com