Covidien to Acquire VNUS for $440M

Covidien Ltd. has agreed to buy VNUS Medical Technologies Inc., a developer of medical devices for minimally invasive treatment of venous reflux disease, according to both companies, for $440 million.

The boards of directors of Covidien, which has its U.S. headquarters in Mansfield, Mass., and VNUS, which is based in San Jose, Calif., have approved the transaction, which is expected to be completed by June 30.

“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 Covidien’s medical devices division.

The president and CEO of VNUS, Brian Farley, said about 500,000 patients who suffer from painful varicose veins and venous reflux have been treated with the company’s VNUS Closure catheter so far.

“By joining Covidien, VNUS gains access to extended global resources to further drive the growth of VNUS products around the world … we look forward to seeing this transaction facilitate expanding the access to this beneficial therapy for many more patients,” said Farley.

Covidien does not anticipate this transaction will have a significant impact on its fiscal 2009 sales or operating margin outlook, and once the transaction is completed, Covidien will report the VNUS business as part of its vascular product line in the medical devices segment.