DUBLIN—Covidien announced yesterday it will sell its sleep diagnostics and oxygen lines, and has a proposal on the table to sell its sleep therapy product line.
Combined sales for the three lines in fiscal 2008 were $175 million, according to a release.
The decision to divest the lines was made after evaluation of a number of strategic alternatives, the company said, and “is consistent with Covidien’s strategy to streamline its portfolio and reallocate resources to its faster-growing, higher-margin businesses, where the company has or can develop a global competitive advantage.”
Broomfield, Colo.-based Embla Systems, which offers sleep diagnostic products and services in more than 65 countries, will acquire Covidien's sleep diagnostics business, including products sold under the Sandman brand. The combined entity will form the world’s largest company to focus entirely on sleep diagnostics, with 1,700 customers in North America and 2,500 worldwide, according to a release,
"You can't open a newspaper or magazine today without seeing something about sleep," said Embla President and CEO David Baker. “We know it impacts every aspect of our lives and this acquisition puts us at the forefront of the industry."
In a separate deal, Cleveland-based Chart Industry’s Caire subsidiary, which operates under its BioMedical segment, will acquire Covidien’s oxygen therapy line, including the Companion and Helios liquid oxygen brands.
“This transaction will allow us to strategically expand our oxygen therapy product offering while leveraging our existing operating footprint and substantially increasing BioMedical's sales by over 50 percent to an expected annual run rate of approximately $150 million,” according to Sam Thomas, Chart Industries chairman, CEO and president. “We expect to complete the integration of these operations, including a cost structure that is more in line with our oxygen therapy business, towards the end of 2010.”
Caire manufactures a full line of liquid oxygen reservoirs and liquid oxygen portables sold under the Liberator and Spirit brands.
Completion of the two product line transactions is expected by the end of 2009, Covidien said. Terms were not disclosed.
Covidien also has proposed the sale of its sleep therapy product line, including several products sold under the DreamFit, GoodKnight and Breeze brands.