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Covidien paying $300 million for Somanetics(4)

Wed, 06/16/2010 - 6:13am
The Associated Press

Covidien PLC, which makes drugs and medical devices, said Wednesday it is buying its distribution partner Somanetics Corp. for almost $300 million.

Covidien is currently the distributor for Somanetics' high-tech diagnostic equipment, called the INVOS Cerebral/Somatic Oximeter, in Europe, the Middle East and Africa. The machine measures changes in the blood oxygen levels of patients undergoing surgery and in critical care

Covidien is paying $25 for each Somanetics share, a 32 percent premium to the company's closing share price of $18.90 on Tuesday. Somanetics, based in Troy, Mich., has almost 12 million shares outstanding.

Covidien said the cost of the buyout comes to $250 million after deducting the cash on Somanetics' balance sheet.

The acquisition is expected to be complete by July 31. Covidien expects the buyout to be dilutive to net income per share in 2010 and 2011.

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