Sam Brusco, Associate Editor10.24.22
Medtronic has announced its plans to spin off its combined Patient Monitoring and Respiratory Interventions businesses.
"We are executing on our portfolio management strategy, taking action to create value for Medtronic and our shareholders. This separation will allow Medtronic to focus our company and our capital on opportunities better aligned with our long-term strategies to accelerate innovation-driven growth, and will position NewCo to unlock value. Independently, NewCo will be a leading connected care company with a compelling leadership position, attractive margins, and potential for growth acceleration with increased investment and dedicated capital allocation," Geoff Martha, chairman and CEO of Medtronic told the press. "Looking ahead, we remain focused on active portfolio management with an ongoing process of evaluating potential additions and subtractions to further accelerate Medtronic's growth over the long-term."
Following the separation of NewCo, Medtronic will have:
Patient Monitoring and Respiratory Interventions reside in the Respiratory, Gastrointestinal & Renal division within the Medtronic Medical Surgical Portfolio. In fiscal year 2022, the combined business generated global revenue of approximately $2.2 billion. The combined business has a constant currency revenue growth profile and gross margin profile slightly below overall Medtronic and an operating margin profile slightly higher than overall Medtronic. The combined business has a global commercial footprint and a team of more than 8,000 employees worldwide.
Medtronic expects the separation to be completed in the next 12 to 18 months.
"We are executing on our portfolio management strategy, taking action to create value for Medtronic and our shareholders. This separation will allow Medtronic to focus our company and our capital on opportunities better aligned with our long-term strategies to accelerate innovation-driven growth, and will position NewCo to unlock value. Independently, NewCo will be a leading connected care company with a compelling leadership position, attractive margins, and potential for growth acceleration with increased investment and dedicated capital allocation," Geoff Martha, chairman and CEO of Medtronic told the press. "Looking ahead, we remain focused on active portfolio management with an ongoing process of evaluating potential additions and subtractions to further accelerate Medtronic's growth over the long-term."
Following the separation of NewCo, Medtronic will have:
- A more streamlined portfolio with sharpened focus on deploying capital into opportunities most aligned with its long-term growth strategies.
- Modestly faster organic revenue growth and an increased weighted average market growth rate.
- A strong balance sheet and continued commitment to its strategy of driving durable growth.
Patient Monitoring and Respiratory Interventions reside in the Respiratory, Gastrointestinal & Renal division within the Medtronic Medical Surgical Portfolio. In fiscal year 2022, the combined business generated global revenue of approximately $2.2 billion. The combined business has a constant currency revenue growth profile and gross margin profile slightly below overall Medtronic and an operating margin profile slightly higher than overall Medtronic. The combined business has a global commercial footprint and a team of more than 8,000 employees worldwide.
Medtronic expects the separation to be completed in the next 12 to 18 months.