Medtronic to sell part of patient monitoring & recovery division for $6.1bnStaff Writer | April 18, 2017
Medtronic has entered into a definitive agreement with Cardinal Health to sell its Patient Care, Deep Vein Thrombosis, and Nutritional Insufficiency businesses within the Patient Monitoring & Recovery (PMR) division of its Minimally Invasive Therapies Group (MITG).
Acquisition Cardinal Health will buy assets
Headquartered in Dublin, Ohio, Cardinal Health is a global, integrated healthcare services and products company, providing customized solutions for hospitals, health systems, and other clinical entities worldwide.
Upon closing, the transaction is expected to result in an immediate positive impact to Medtronic's comparable, constant currency revenue growth rate and non-GAAP comparable, constant currency operating margin of approximately 50 basis points each.
Under the terms of the definitive agreement, Medtronic will receive $6.1 billion in cash, subject to certain adjustments, with total after-tax proceeds estimated to be approximately $5.5 billion.
Medtronic intends to allocate $1 billion of the after-tax proceeds for incremental share repurchases in FY18, with the balance used to reduce its debt.
This deployment of proceeds is consistent with Medtronic's near-term capital allocation strategy, improves the company's debt leverage ratio, and enables future investments in higher growth and higher margin opportunities.
The company remains committed to a capital allocation policy that balances returns to its shareholders with reinvestment in its businesses. ■