Separation of the combined Patient
Monitoring and Respiratory Interventions businesses ("NewCo")
expected to better position both NewCo and
Medtronic for long-term success and value creation
- Enhances both Medtronic and NewCo's strategic and operational
focus on meeting the needs of their respective patients,
physicians, customers, and other stakeholders
- Advances the Medtronic portfolio management and capital
allocation strategies focused on higher growth markets and revenue
acceleration
- Pursuing NewCo separation via a distribution that is expected
to be tax-free to Medtronic shareholders for U.S. federal income
tax purposes or other alternatives
DUBLIN, Oct. 24,
2022 /CNW/ -- Medtronic plc (NYSE:MDT), a global
leader in healthcare technology, today announced its intention to
pursue a separation of the company's combined Patient Monitoring
and Respiratory Interventions businesses ("NewCo"), which are part
of the company's Medical Surgical Portfolio.
"We are executing on our portfolio management strategy, taking
action to create value for Medtronic and our shareholders. This
separation will allow Medtronic to focus our company and our
capital on opportunities better aligned with our long-term
strategies to accelerate innovation-driven growth, and will
position NewCo to unlock value. Independently, NewCo will be a
leading connected care company with a compelling leadership
position, attractive margins, and potential for growth acceleration
with increased investment and dedicated capital allocation," said
Geoff Martha, chairman and CEO of
Medtronic. "Looking ahead, we remain focused on active portfolio
management with an ongoing process of evaluating potential
additions and subtractions to further accelerate Medtronic's growth
over the long-term."
Medtronic – The leading global healthcare technology
company
The decision to pursue a separation represents an important next
step in ongoing portfolio assessment by Medtronic that demonstrates
its commitment to creating value for all of its stakeholders. The
separation will enable greater investment focus in the areas of
highest strategic priority across the company, and will facilitate
the execution of its leadership strategy in attractive medtech
markets that leverage the company's strengths. Following the
separation of NewCo, Medtronic will have:
- A more streamlined portfolio with sharpened focus on deploying
capital into opportunities most aligned with its long-term growth
strategies;
- Modestly faster organic revenue growth and an increased
weighted average market growth rate (WAMGR); and
- A strong balance sheet and continued commitment to its strategy
of driving durable growth.
NewCo is uniquely positioned to offer the full suite of
connected patient monitoring and respiratory care solutions
NewCo is expected to be a premier partner for
connected care solutions with best-in-class brands and
leading positions in patient monitoring and critical care:
- The Patient Monitoring technology portfolio includes Nellcor™
pulse oximetry, Microstream™ capnography, BIS™ brain monitoring,
INVOS™ perfusion monitoring, and HealthCast™ connected care
solutions.
- The Respiratory Interventions technology portfolio includes
Puritan Bennett™ ventilators, Shiley™ airway portfolio, McGrath™
MAC video laryngoscopy, DAR™ breathing systems, as well as PAV+,
NIV+ and IE Sync ventilation software solutions designed to improve
workflow and care delivery.
Patient Monitoring and Respiratory Interventions reside in the
Respiratory, Gastrointestinal & Renal division within the
Medtronic Medical Surgical Portfolio. In fiscal year 2022, the
combined business generated global revenue of approximately
$2.2 billion. The combined business
has a constant currency revenue growth profile and gross margin
profile slightly below overall Medtronic and an operating margin
profile slightly higher than overall Medtronic. The combined
business has a global commercial footprint and a team of more than
8,000 employees worldwide.
NewCo is expected to be ideally positioned to deliver
expanded value creation through:
- Global scale and commercial reach to drive increased
penetration in core strategic markets;
- Connected care solutions to drive increased share within
existing customer accounts globally;
- Investments in innovation to drive technology leadership, new
parameter expansion, and expand its addressable market segments;
and
- Durable growth with an attractive margin and cash flow
profile.
Medtronic plans to redeploy any net proceeds consistent
with its stated capital allocation priorities. Medtronic does not
expect this separation to impact its dividend policy.
Medtronic expects the separation to be completed in the next 12
to 18 months subject to the satisfaction of closing conditions,
including obtaining final approval from the Medtronic Board of
Directors, receipt of tax opinions and receipt of other regulatory
approvals. Medtronic plans to provide additional
details on the potential transaction in due course. There
can be no assurance regarding the ultimate timing or structure of
the potential separation or that a separation will be completed at
all, or if completed, what form the separation would take.
Medtronic's financial advisors on the transaction are Perella
Weinberg Partners LP and Goldman Sachs & Co. LLC. Its legal
advisors on the transaction are Wachtell, Lipton, Rosen & Katz; Skadden, Arps,
Slate, Meagher & Flom LLP; and Baker McKenzie.
Presentation
Click here to access the presentation
discussing this announcement.
Webcast Information
Medtronic will host a webcast
today, Monday, October 24, at
8:30 a.m. EDT (7:30 a.m. CDT) to discuss this announcement. The
webcast can be accessed by clicking on the Events icon at
investorrelations.medtronic.com. Within 24 hours of the webcast, a
replay will be available by clicking on the Events icon at
investorrelations.medtronic.com.
About Medtronic
Bold thinking. Bolder actions. We are
Medtronic. Medtronic plc, headquartered in Dublin, Ireland, is the leading global
healthcare technology company that boldly attacks the most
challenging health problems facing humanity by searching out and
finding solutions. Our Mission — to alleviate pain, restore health,
and extend life — unites a global team of 95,000+ passionate people
across 150 countries. Our technologies and therapies treat 70
health conditions and include cardiac devices, surgical robotics,
insulin pumps, surgical tools, patient monitoring systems, and
more. Powered by our diverse knowledge, insatiable curiosity, and
desire to help all those who need it, we deliver innovative
technologies that transform the lives of two people every second,
every hour, every day. Expect more from us as we empower
insight-driven care, experiences that put people first, and better
outcomes for our world. In everything we do, we are engineering the
extraordinary. For more information on Medtronic (NYSE:MDT), visit
www.Medtronic.com and follow @Medtronic on Twitter and
LinkedIn.
Forward Looking Statements
This press release includes
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. All statements other
than statements of historical fact are, or may be deemed to be,
forward-looking statements. In some cases, forward-looking
statements can be identified by the use of forward-looking terms
such as "anticipate," "estimate," "believe," "continue," "could,"
"intend," "may," "plan," "potential," "predict," "should," "will,"
"expect," "objective," "projection," "forecast," "goal,"
"guidance," "outlook," "effort," "target," "trajectory" or the
negative of these terms or other comparable terms. However, the
absence of these words does not mean that the statements are not
forward-looking. These forward-looking statements are based on
certain assumptions and analyses made by Medtronic plc (the
"Company") in light of its experience and its perception of
historical trends, current conditions and expected future
developments, as well as other factors the Company believes are
appropriate in the circumstances. These forward-looking statements
are subject to known and unknown risks, uncertainties and
assumptions that may cause actual results, levels of activity,
performance or achievements to be materially different from any
future results, levels of activity, performance or achievements
expressed or implied by such forward-looking statements. Factors
that might cause or contribute to a material difference include:
risks and uncertainties as to the terms, timing, structure,
benefits and costs of any separation transaction and whether one
will be consummated at all; the impact of any separation
transaction on the remaining businesses of the Company; economic
conditions generally; competition and pricing pressures;
difficulties and delays inherent in the development, regulatory
approval, manufacturing, marketing and sale of medical products;
fluctuations in currency exchange rates; fluctuations in fixed and
floating interest rates; fuel price and fuel surcharge changes;
risks related to the Company's intellectual property rights;
governmental regulation, including trade compliance laws;
governmental or political actions; and other risks and
uncertainties that are described in the documents the Company files
from time to time with the U.S. Securities and Exchange
Commission.
All forward-looking statements set forth in this press release
are qualified by these cautionary statements and there can be no
assurance that the actual results or developments anticipated by
the Company will be realized or, even if substantially realized,
that they will have the expected consequences to or effects on the
Company or its business or operations. Forward-looking statements
set forth in this press release speak only as of the date hereof,
and the Company does not undertake any obligation to update
forward-looking statements to reflect subsequent events or
circumstances, changes in expectations or the occurrence of
unanticipated events, except to the extent required by law.
Contacts:
Erika
Winkels
|
Ryan
Weispfenning
|
Public
Relations
|
Investor
Relations
|
+1-763-526-8478
|
+1-763-505-4626
|
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SOURCE Medtronic plc