by Trevor Williams | December 17, 2013
Given Imaging Ltd., an Israeli firm that parlayed missile imaging technology into pill cameras, has agreed to be acquired by Dublin, Ireland-based Covidien for about $30 per outstanding share, or about $860 million in cash.
The transaction is sure to have ripple effects in Atlanta, where Yoqneam, Israel-based Given Imaging set up its Americas headquarters in 2001.
Given developed pill cameras that provide images of a patient’s gastrointestinal tract after swallowing, reducing the need for more invasive procedures. It also has developed other ingestible products that measure and monitor pressure, pH levels and other diagnostics.
"Adding Given’s portfolio of diagnostics to our portfolio accelerates Covidien’s strategy of providing physicians with products that support the patient along the care continuum from diagnosis to treatment,” Bryan Hanson, group president for medical devices and the U.S. for Covidien, said in a news release.
Given Imaging sold a record 63,500 Pillcams in the third quarter of 2013, boosting quarterly revenues to $50 million for the first time ever and posting a 10 percent jump over the same period last year. Sales for the first three quarters of 2013 were $140.1 million, up from $131.8 million. That led to $11.4 million in profit during the nine-month period, up from $9.1 million in 2012.
Covidien believes Given can continue to match that performance, noting in its Dec. 8 announcement that the company expects Given to contribute $40-$50 million in quarterly revenues to its medical device segment, into which the Given will be rolled.
The companies expect to close the transaction in March.
Given Imaging products have served more than 2 million patients in 80 countries. A PillCam used for colon cancer screening was cleared for use in Japan in July, and the Japanese health ministry announced that it would reimburse physicians $840 per PillCam COLON used starting in January. U.S. Food and Drug Administration approval for the device is expected soon, building on recent approval of the newest Pillcam model, the SB 3.
In a letter to customers posted on its website, Given Imaging Americas President Skip Baldino said the company shares a “strategic vision” with Covidien and that Given Imaging teams would continue to serve customers.
A spokesman contacted Thursday couldn’t yet say if changes were planned to the company’s Atlanta operations as a result of the acquisition.
Covidien has more than 38,000 employees in more than 70 countries.