Wednesday, December 24, 2008

Covidien to move from Bermuda to Ireland

By Mass High Tech staff

Medical device and pharmaceuticals maker Covidien Ltd. has announced plans to move its executive office from Bermuda to Ireland in a first step in reorganizing and creating Covidien plc, a new Irish company that will replace Covidien Ltd. as the parent company. The move will not impact its U.S. operations or workforce, including its U.S. headquarters in Mansfield, Covidien officials said in a press release.

The Covidien (NYSE: COV; BSX: COV) board of directors approved the company’s reorganization and relocation, which is expected to improve its global operations and add more flexibility. The move now awaits approval from shareholders and the Supreme Court of Bermuda.

The company chose Ireland because of its 30-year history of running operations there, its European Union relationship and its history and strength in global investment. Currently, Covidien employs 2,000 workers in Ireland, according to officials, and it maintains five factories associated with medical devices and imaging solutions.

In November, Covidien officials said it saw a 12 percent spike in sales for the fourth quarter, belying the gloomy economy and ending the year with annual sales growth. Also, the company said its profit soared to $409 million for the final 2008 fiscal quarter, up from $34 million for the same period last year.

Moreover, international regions, including Europe, Asia-Pacific and the Americas excluding North America also delivered double-digit sales gains. The fourth-quarter gross margin was 54.6 percent, up 2.8 percentage points from the same quarter last year. This “significant improvement” was enabled by favorable foreign exchange rates and Covidien’s product mix, which included new brands in its Dosage pharmaceutical line, the company stated.

Covidien has over 41,000 employees in 59 countries.