Covidien to Acquire Given Imaging

Irish medical device maker Covidien plc will acquire Israeli camera-in-a-pill maker Given Imaging Ltd. for $30 a share in cash, or a total of $860 million, the companies said.

The acquisition occurred after three units of Nochi Dankner’s IDB group − Elron Electronic Industries, Discount Investment Corporation and RDC Rafael Development Corporation − agreed on Dec. 7 to sell their stakes without revealing the name of the buyer.

Covidien will be making an offer to buy all of Given’s shares, including those traded on the Tel Aviv Stock Exchange and the Nasdaq, which will lead to the delisting of the stock when the transaction closes at the end of March.

Shares of Given Imaging, whose technology is used to visualize, diagnose and monitor the digestive system, jumped more than 21 percent to close at 99.30 shekels in Tel Aviv Stock Exchange trading on Dec. 8. The company’s shares closed at $23.65 on Nasdaq on Dec. 6.

“We believe GI [gastrointestinal] is one of the most attractive specialty procedure areas. Acquiring Given will enable Covidien to significantly expand its presence in a $3 billion GI market,” said Bryan Hanson, group president for medical devices and the United States at Covidien. “Adding Given’s portfolio of diagnostics to our portfolio accelerates Covidien’s strategy of providing physicians with products that support the patient along the care continuum from diagnosis to treatment. It also confirms our leadership in developing less-invasive screening, diagnosis and treatment solutions that can improve patient outcomes and lower healthcare costs.”

Given was formed in 1998 and won its first approval for its miniature camera three years later. Its technology is based on technology used for guided missiles, which one of the two founders, Gabi Iddan, worked on at Rafael.

“After thoroughly evaluating our strategic options we determined that this transaction is in the best interests of Given Imaging, its shareholders and employees and provides unique benefits to patients globally,” Given Imaging CEO Homi Shamir said in a statement.

The boards of both companies have approved the deal, as have the boards of Given’s major shareholders, who own 44 percent of Given’s outstanding shares.

For IDB, the sale raises badly needed cash as it struggles with billions of shekels in debt. The sale represents a victory for Dankner, who last February rejected an offer for Given shares of $15 apiece.