Medtronic Sheds External Defib Business

Minneapolis, MN-based Medtronic announced that it will spin off its external difibrillator business into an independent, publicly traded company, according to the Associated Press.

The business will be known as Physio-Control Inc. and will trade on the New York Stock Exchange. The new company’s estimated annual sales will be $450 million.

Medtronic’s implantable cardioverter defibrillators are not affected by the spinoff and will remain with Medtronic.

“The creation of this new company will enable Medtronic to more directly focus on resources on high-growth therapies aimed at chronic disease management,” said Medtronic CEO Art Collins.

In a conference call with analysts, Collins said the external defibrillation business is already fairly freestanding within Medtronic, with separate headquarters in Redmond, WA, its own manufacturing systems and other independent business operations.

The new company will have about 1,200 employees in more than 100 countries.

Thomas Gunderson, an analyst at Piper Jaffray & Co. in Minneapolis, said the spinoff makes sense, and was viewed as a small event by Wall Street. “There was little value attributed from this business unit to the overall stock valuation of (Medtronic),” said Gunderson.