Covidien has reached a definitive agreement to acquire VNUS Medical Technologies, a developer of medical devices for minimally invasive treatment of venous reflux disease, for approximately $440 million.
The boards of directors of both companies have unanimously approved the transaction, pursuant to which VNUS will become a wholly owned subsidiary of the Dublin, Ireland-based Covidien. The transaction, which will take the form of an all cash tender offer followed by a second-step merger, is subject to customary closing conditions, including receipt of certain regulatory approvals, and is expected to be completed by June 30.
VNUS, based in San Jose, Calif., had 2008 revenues of $101 million. Venous reflux disease is an underlying cause of varicose veins that can result in symptoms, including leg pain, swelling, fatigue and skin ulcers. VNUS's products include the VNUS Closure system, which employs a disposable radiofrequency catheter that heats and closes diseased veins.
"The acquisition of VNUS will allow Covidien to expand its presence in the vascular market and is in line with our strategy of becoming a leading partner with vascular surgeons and interventional radiologists," said Joe Almeida, president of medical devices at Covidien.
Assuming a second calendar quarter closing, Covidien expects this transaction to dilute fiscal 2009 GAAP earnings per share, primarily due to a one-time charge for in-process research and development.