Covidien (NYSE: COV), a leading global provider of healthcare products, today announced definitive agreements to sell its Sleep Diagnostics and Oxygen Therapy product lines and a proposal to sell its Sleep Therapy product line.
The decision to divest these three 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.
Covidien and Embla have entered into a definitive agreement under which Embla will acquire Covidien’s Sleep Diagnostics products, including design/development, sales administration, technical service and shipping facilities in Ottawa, Canada, as well as global sales and service functions. This includes several products sold under the Sandman™ brand. Financial terms of the transaction were not disclosed.
Separately, Covidien and Chart Industries, Inc. (NASDAQ: GTLS) have entered into a definitive agreement under which Chart will acquire Covidien’s Oxygen Therapy products, including the design, manufacturing, sales and service functions worldwide. This includes products sold under the Companion™ and Helios™ brands. Financial terms of the transaction were not disclosed.
The Company also has proposed the sale of its Sleep Therapy product line. This includes several products sold under the Sandman™ brand, as well as the DreamFit™, GoodKnight™ and Breeze™ brands.
On a combined basis, fiscal 2008 sales of these three product lines were about $175 million. For the nine months 2009, sales of these product lines were about $100 million.
Completion of the two product line sale transactions is subject to customary closing conditions, with closing expected by the end of calendar 2009. The transactions are not expected to have a material effect on operating income or earnings per share for 2010.