Medtronic Makes Second European Purchase This Week
Medtronic announced its second European acquisition in as many days on Wednesday as the Fridley-based medical technology giant said it added a privately held Italian company in a $350 million transaction.
Medtronic already held a 30 percent ownership stake in NGC Medical S.p.A. (NGC) before buying the rest of the company, which manages cardiovascular suites, operating rooms and intensive care units at hospitals across Italy.
NGC will serve as the managed services arm for Medtronic’s hospital solutions business and will operate as a separate entity. The NGC purchase also furthers Medtronic’s overseas efforts as NGC had been expanding services throughout Europe, the Middle East and Africa.
The announcement followed by just one day a $200 million cash purchase of Sapiens Steering Brain Stimulation, a Dutch developer of brain-stimulation technology. Medtronic said neither of this week’s acquisitions would affect fiscal year 2015 earnings.
Medtronic’s two purchases this week were its latest in a series of moves in Europe this past year. In June, Medtronic announced plans to acquire Ireland-based Covidien in a $43 billion cash-and-stock purchase that would result in Medtronic’s legal headquarters shifting to Ireland. Moving its legal headquarters to Ireland would save on taxes Medtronic would otherwise pay to bring foreign-generated cash back to the U.S., an idea that has been the subject of debate since the plans were announced.
Medtronic’s hospital solutions business has partnered with hospitals in the region to provide lab managed services, recently providing hospital efficiency solutions to Maastricht University Medical Center in The Netherlands, producing an estimated savings there of $6 million in one year. Medtronic said its long-term contracts in Europe represent more than $500 million in revenue and that the company is in discussions with an additional 150 health care systems around the world.
Last month, Medtronic acquired Visualase, a Houston-based developer of laser systems for neurosurgeries, in a deal worth up to $105 million. Earlier this year, it also purchased Tyrx, Inc., a New Jersey-based anti-infection technology firm for an initial $160 million in cash with the potential for future performance-based payments.