Covidien Completes Sale of Sleep Therapy Products, Chemicals Business

Covidien plc is streamlining its product offering.

The Dublin, Ireland-based company has completed the sale of its sleep therapy continuous positive airway pressure (CPAP) and Bi-level products to PH Invest, a privately held company located in Luxembourg. Neither company released financial terms of the deal.

The sale included manufacturing facilities in Nancy, France, commercial operations in Europe and products sold under the GoodKnight and Sandman brands. The agreement excludes the sleep interface products sold and marketed under the brand names Adam, Breeze and Dreamfit, which Covidien will continue to sell.

The sale of sleep products and its specialty chemicals business is not expected to affect Covidien’s operating income or its earnings per share for fiscal 2010 or 2011.

In May, the company agreed to sell its specialty chemicals business to an affiliate of New York City-based New Mountain Capital LLC for about $280 million in cash. Based in Phillipsburg, N.J., Covidien’s specialty chemicals business makes high-purity chemicals and related products under brand names J.T. Baker and Mallinckrodt Laboratory Chemicals.

Covidien executives said they made the decision to divest the GoodKnight and Sandman product lines and the specialty chemicals business after reviewing a number of strategic alternatives. The decision is consistent with the company’s strategy to streamline its portfolio and reallocate resources to its faster-growing, higher-margin businesses.

That strategy led Covidien in June to acquire ev3 Inc., a Minneapolis, Minn.-based firm that develops treatments for clogged arteries and aneurysms. Covidien bigwigs said the $2.6 billion deal will help the company expand its presence in the peripheral vascular and neurovascular markets.