Medtronic announced a big spinoff move to separate its combined patient monitoring and respiratory interventions businesses.
The spinoff, dubbed NewCo, will separate the patient monitoring and respiratory interventions business from the rest of the company’s medical surgical portfolio. Medtronic, a healthcare technology company based in Dublin, Ireland, covers technologies and therapies that treat 70 health conditions and also includes cardiac devices, surgical robotics, insulin pumps, surgical tools, patient monitoring systems and more.
The company sees the spinoff of NewCo as an opportunity to better position both entities and create value. Medtronic noted the move is part of an ongoing portfolio assessment. Post spinoff, Medtronic will have a more streamlined portfolio, modestly faster organic revenue growth and an increased weighted average market growth rate, as well as a stronger balance sheet.
The patient monitoring and respiratory interventions businesses created global revenue of $2.2 billion in fiscal year 2022, or about 7% of Medtronic’s $29.4 billion revenue for FY 2022, according to a presentation on the separation. The combined businesses have a global commercial footprint and a team of more than 8,000 employees worldwide. According to Medtronic, the businesses have “a constant currency revenue growth profile and gross margin profile slightly below overall Medtronic and an operating margin profile slightly higher than overall Medtronic.”
Image courtesy of Medtronic.
"We are executing on our portfolio management strategy, taking action to create value for Medtronic and our shareholders,” Geoff Martha, chairman and CEO of Medtronic, said in a statement. “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.”
Within the patient monitoring and respiratory interventions businesses includes somes of its major brands, including:
- Nellcor pulse oximetry, Microstream capnography, BIS brain monitoring, INVOS perfusion monitoring, and HealthCast connected care solutions in the remote patient monitoring portfolio; and
- Puritan Bennett ventilators, Shiley airway portfolio, McGrath MAC video laryngoscopy, DAR breathing systems, as well as PAV+, NIV+ and IE Sync ventilation software solutions in the respiratory interventions technology portfolio.
The spinoff of NewCo is expected to be completed in the next 12 to 18 months, subject to closing conditions, approval from the Medtronic Board of Directors and other conditions.
Amy joined TriMed Media as a Senior Writer for HealthExec after covering home care for three years. When not writing about all things healthcare, she fulfills her lifelong dream of becoming a pirate by sailing in regattas and enjoying rum. Fun fact: she sailed 333 miles across Lake Michigan in the Chicago Yacht Club "Race to Mackinac."