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8-K - FORM 8-K - ev3 Inc. | c58489e8vk.htm |
EX-2.1 - EX-2.1 - ev3 Inc. | c58489exv2w1.htm |
EX-99.1 - EX-99.1 - ev3 Inc. | c58489exv99w1.htm |
EX-99.2 - EX-99.2 - ev3 Inc. | c58489exv99w2.htm |
Exhibit 99.3
Covidien Announces Definitive Agreement to Acquire ev3 Inc.
| Adds significant scale to vascular platform with strong market positions | ||
| Provides broad product portfolio and robust pipeline in high-growth market segments | ||
| Leverages global infrastructure, physician education and training expertise |
Dublin, Ireland and Plymouth, MN June 1, 2010 Covidien plc (NYSE: COV) and ev3 Inc. (NASDAQ:
EVVV) today announced that they have signed a definitive merger agreement under which Covidien will
acquire all of the outstanding shares of ev3 Inc. for $22.50 per share in cash, for a total of $2.6
billion, net of cash acquired. This transaction further accelerates Covidiens strategy of
building a world-class vascular platform addressing high-growth markets and positions Covidien to
become a leading endovascular player, with strong positions in both the peripheral vascular and
neurovascular markets.
The acquisition of ev3 will enable Covidien to significantly expand its presence in the vascular
market and is in line with our strategy of becoming a leading partner with vascular surgeons,
neurosurgeons, interventional cardiologists and interventional radiologists, said Richard J.
Meelia, Chairman, President and CEO of Covidien. With its broad product portfolio, clinical
expertise and call-point synergies with our existing vascular franchise, ev3 will be an important
addition to our innovative vascular intervention products.
We believe this transaction will provide truly unique opportunities and will create value for both
companies stockholders, patients and employees, said Robert Palmisano, President and CEO of ev3.
We will be able to advance our broad platform of peripheral vascular and neurovascular
technologies with a leading global healthcare products company that shares our vision of delivering
breakthrough and innovative medical solutions for improved patient outcomes. In addition, this
combination will provide the opportunity for further innovation to support endovascular market
growth and procedure penetration worldwide, while our employees will be afforded the opportunity to
be part of a larger organization with greater depth of resources for sustained success in our
industry.
ev3 Inc. is dedicated to developing innovative, breakthrough and clinically proven technologies and
solutions for the treatment of peripheral vascular and neurovascular diseases. ev3 offers a
comprehensive portfolio of treatment options, including the primary interventional technologies
used today: peripheral angioplasty balloons, stents, plaque excision systems, embolic protection
devices, liquid embolics, embolization coils, flow diversion, thrombectomy catheters and occlusion
balloons.
Financial Highlights
Under the terms of the agreement, Covidien will pay $22.50 in cash per ev3 share for a total of
approximately $2.6 billion, net of cash acquired. The combination with ev3 will provide an
additional growth platform for Covidien and is expected to be accretive to both revenue and
earnings growth rates.
The transaction, which will take the form of an all-cash tender offer by a wholly-owned subsidiary
of Covidien, followed by a second-step merger, is subject to customary closing conditions,
including receipt of certain regulatory approvals, and is expected to be completed by July 31,
2010. The Boards of Directors of both companies have unanimously approved the transaction. All of
the directors and executive officers of ev3 have confirmed their intention to tender all shares
held by them into the offer, and certain stockholders affiliated with Warburg, Pincus Equity
Partners LP, holding approximately 24% of ev3s outstanding common stock, have entered into
agreements with Covidien to tender their shares. Once the transaction has been completed, Covidien
will report ev3 as part of its Vascular Products line in the Medical Devices business segment.
Assuming a closing on July 31, 2010, Covidien expects that this transaction, on a GAAP basis, will
dilute 2010 and 2011 earnings per share. On a Non-GAAP basis, excluding transaction, restructuring
and other costs, Covidien expects this transaction to dilute fiscal 2010 earnings per share by 5 to
8 cents; however, the underlying strength of Covidiens existing businesses is expected to offset a
portion of this dilution. Covidien expects fiscal 2011 Non-GAAP earnings per share to be diluted
by approximately 10 to 15 cents, primarily due to higher depreciation/amortization, interest and
income tax expenses.
Covidien intends to finance the transaction through a combination of cash on hand, commercial paper
and a fully committed bridge facility.
Covidien will hold a conference call and web cast with investors today at 8:00 a.m. ET to discuss
this announcement. Call details can be found later in this release.
About Covidien
Covidien is a leading global healthcare products company that creates innovative medical solutions
for better patient outcomes and delivers value through clinical leadership and excellence.
Covidien manufactures, distributes and services a diverse range of industry-leading product lines
in three segments: Medical Devices, Pharmaceuticals and Medical Supplies. With 2009 revenue of
$10.7 billion, Covidien has 42,000 employees worldwide in more than 60 countries, and its products
are sold in over 140 countries. Please visit www.covidien.com to learn more about our business.
About ev3
Since its founding in 2000, ev3 has been dedicated to developing breakthrough and clinically proven
technologies for the endovascular treatment of peripheral vascular and neurovascular diseases. The
company offers a comprehensive portfolio of treatment options, including the primary interventional
technologies used today plaque excision systems, peripheral angioplasty balloons, stents,
embolic protection devices, liquid embolics, embolization coils, flow diversion, thrombectomy
catheters and occlusion balloons. More information about the company and its products can be found
at http://www.ev3.net.
Covidien Contacts
Eric Kraus
Senior Vice President
Corporate Communications
508-261-8305
eric.kraus@covidien.com
Senior Vice President
Corporate Communications
508-261-8305
eric.kraus@covidien.com
Bruce Farmer
Vice President
Public Relations
508-452-4372
bruce.farmer@covidien.com
Vice President
Public Relations
508-452-4372
bruce.farmer@covidien.com
Coleman Lannum, CFA
Vice President
Investor Relations
508-452-4343
cole.lannum@covidien.com
Vice President
Investor Relations
508-452-4343
cole.lannum@covidien.com
Brian Nameth
Director
Investor Relations
508-452-4363
brian.nameth@covidien.com
Director
Investor Relations
508-452-4363
brian.nameth@covidien.com
ev3 Contact
Julie Tracy
Sr. Vice President
Chief Communications Officer
949-680-1375
jtracy@ev3.net
Sr. Vice President
Chief Communications Officer
949-680-1375
jtracy@ev3.net
CONFERENCE CALL AND WEBCAST
Covidien will hold a conference call for investors today, beginning at 8:00 a.m. ET. This call
can be accessed three ways:
| At Covidiens website: http://investor.covidien.com | ||
| By telephone: For both listen-only participants and those participants who wish to take part in the question-and-answer portion of the call, the telephone dial-in number in the U.S. is 800-299-7098. For participants outside the U.S., the dial-in number is 617-801-9715. The access code for all callers is 56418613. | ||
| Through an audio replay: A replay of the conference call will be available beginning at 9:00 a.m. on June 2, 2010, and ending at 5:00 p.m. on June 8, 2010. The dial-in number for U.S. participants is 888-286-8010. For participants outside the U.S., the replay dial-in number is 617-801-6888. The replay access code for all callers is 46835409. |
Supporting materials for the conference call are now available on the Investor Relations section
of Covidiens website: http://investor.covidien.com
FORWARD-LOOKING STATEMENTS
This release contains forward-looking statements that are not historical facts. Covidien and ev3
have identified some of these forward-looking statements with words like believe, may, could,
would, might, possible, will, should, expect, intend, plan, anticipate, or
continue, the negative of these words, other terms of similar meaning or the use of future dates.
Forward-looking statements in this release include without limitation statements
regarding the expected timing of the completion of the transaction and statements regarding the
effect of the transaction on Covidiens business and competitive position, statements regarding
future innovation and market growth and statements regarding Covidiens future financial
performance and financial condition. Investors and security holders are cautioned not to place
undue reliance on these forward-looking statements. Actual results could differ materially from
those currently anticipated due to a number of risks and uncertainties. Risks and uncertainties
that could cause results to differ from expectations include: uncertainties as to the timing of the
transaction; uncertainties as to how many of ev3s stockholders will tender their shares in the
offer; the risk that competing offers will be made; the possibility that various closing conditions
for the transaction may not be satisfied or waived, including that a governmental entity may
prohibit, delay or refuse to grant approval for the consummation of the transaction; the effects of
disruption from the transaction making it more difficult to maintain relationships with employees,
customers, vendors and other business partners; the risk that stockholder litigation in connection
with the transaction may result in significant costs of defense, indemnification and liability;
other business effects, including the effects of industry, economic or political conditions outside
of Covidiens and ev3s control; transaction costs; actual or contingent liabilities; and other
risks and uncertainties discussed in Covidiens and ev3s filings with the U.S. Securities and
Exchange Commission, including the Risk Factors sections of Covidiens and ev3s most recent
annual report on Form 10-K and subsequent quarterly reports on Form 10-Q, as well as the tender
offer documents to be filed by COV Delaware Corporation, a wholly-owned subsidiary of Covidien, and
the Solicitation/Recommendation Statement to be filed by ev3. Neither Covidien nor ev3 undertakes
any obligation to update any forward-looking statements as a result of new information, future
developments or otherwise, except as expressly required by law. All forward-looking statements in
this announcement are qualified in their entirety by this cautionary statement.
NON-GAAP Financial Information
This release contains a non-GAAP financial measure. This non-GAAP financial measure, which is used
as a measure of Covidiens performance, should be considered in addition to, not as a substitute
for, or superior to, measures of Covidiens financial performance prepared in accordance with GAAP.
Covidiens non-GAAP measures may be defined differently than similar terms used by other
companies, and accordingly, care should be exercised in understanding how Covidien defines its
non-GAAP financial measures.
Specifically, any one-time charge for transaction costs, restructuring, and future payment charges
are excluded from the projected earnings per share dilution.
Covidien management uses this non-GAAP financial measure because it believes it is useful and more
meaningful to assess projected earnings per share dilution excluding the transaction-related
expenses. This non-GAAP financial measure is also used by Covidiens management in their financial
and operating decision-making because management believes it reflects the underlying economics of
Covidiens ongoing business in a manner that allows meaningful period-to-period comparisons. Such
comparisons may be more meaningful because operating results presented under GAAP may include, from
time to time, items that are not necessarily relevant to understand Covidiens business and may, in
some cases, be
difficult to forecast accurately for future periods. Covidiens management believes that this
non-GAAP financial measure provides useful information to investors and others in understanding and
evaluating Covidiens current operating performance and future prospects in the same manner as
management does if they so choose. Non-GAAP financial measures have limitations, however, because
they do not include all items of income and expense that affect Covidiens operations. Covidiens
management compensates for this and other limitations by also considering Covidiens financial
results as determined in accordance with GAAP.
IMPORTANT INFORMATION ABOUT THE TENDER OFFER
This release is neither an offer to purchase nor a solicitation of an offer to sell any securities
of ev3 Inc. COV Delaware Corporation (Purchaser), an indirect, wholly-owned subsidiary of
Covidien, has not commenced the tender offer for the shares of ev3 common stock described in this
release.
Upon commencement of the tender offer, Purchaser will file with the SEC a tender offer statement on
Schedule TO and related exhibits, including the offer to purchase, letter of transmittal, and other
related documents. Following commencement of the tender offer, ev3 will file with the SEC a tender
offer solicitation/recommendation statement on Schedule 14D-9. These documents will contain
important information about Covidien, ev3, the transaction and other related matters. Investors and
security holders are urged to read each of these documents carefully when they are available.
Investors and security holders will be able to obtain free copies of the tender offer statement,
the tender offer solicitation/recommendation statement and other documents filed with the SEC by
Purchaser and ev3 through the web site maintained by the SEC at www.sec.gov. In addition, investors
and security holders will be able to obtain free copies of these documents by contacting:
Covidien
Investor Relations
508-452-4650
investor.relations@covidien.com
Investor Relations
508-452-4650
investor.relations@covidien.com
or
ev3 Inc.
Julie Tracy
Sr. Vice President
Chief Communications Officer
949-680-1375
jtracy@ev3.net
Julie Tracy
Sr. Vice President
Chief Communications Officer
949-680-1375
jtracy@ev3.net