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News of Covidien acquisition boosts Given Imaging

December 8
7:11 PM 2013

News of Covidien's takeover deal led to a surge of Given Imaging's stock. Based in Yokneam, Israel, Given Imaging develops an imaging diagnostic system which enables medical professionals to examine a patient's gastrointestinal tract through a miniature camera placed in a capsule swallowed by the patient. Covidien is a Dublin, Ireland-based global healthcare company which develops and manufactures medical devices and supplies.

Given Imaging shares rose 21% to USD 28.18 after Covidien said it would be purchasing all of the Israeli firm's outstanding shares at a 27% premium to the closing price of its shares traded in the US. The increase was the highest Given attained since November 2007, according to a Bloomberg report.  

Covidien said it would be buying all the outstanding shares at USD 30 per share for a deal that would reach an estimated USD 860 million. Given's shares last closed at USD 23.65. Bloomberg reported that shares of the swallowable camera-maker have increased to more than twice since their low six months ago as rumors about the takeover grew. Pillcam is the flagship product of Given, a camera that can be swallowed to examine the esophagus, small bowel and colon.

In BusinessWire statement, Given President and Chief Executive Officer Homi Shamir said, "This transaction is in the best interests of Given Imaging, its shareholders and employees." Covidien said that when the transaction closes, Given will add up to USD 50 million quarterly in incremental revenue to its segment on medical devices.

Data gathered by Bloomberg showed that Given Imaging is the third acquisition of Covidien in Israel in the last two years. In April last year, Covidien purchased Polytouch Medical Ltd. Three months later, it also bought Oridion Systems Ltd. Bloomberg reported that investors are pouring cash to Israel, the country which has the most startup firms per capita of any other country worldwide.

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