Tech Dealmaker Awards

Tyco International Ltd. filed in January with the U.S. Securities and Exchange Commission to spin off its health-care division into an independent, publicly traded, nearly $10 billion company.

Mansfield-based Tyco Healthcare became Covidien Ltd. and made its independence official June 29, 2007.

Covidien products compete in five business segments: medical devices, imaging solutions, pharmaceutical products, medical supplies and retail products. Revenue in 2006 was $9.6 billion, with over one-third of Covidien’s sales outside the United States. Covidien employs more than 43,000 people in 57 countries, and its products are distributed in over 130 countries.

Covidien separated from Tyco to gain independence and set its own path in the market, said director of financial communications Bruce Farmer.

“One of the problems with being part of an industrial conglomerate is not being able to chart your own course,” said Farmer. “We couldn’t invest in areas like sales, research and development. Being independent, we plan to use our $1 billion-per-year cash flow to make acquisitions and new developments.”

Covidien wasted little time trying to make a brand name for itself, and separating itself from the troubled recent past of its former parent Tyco, which had seen two top executives convicted of fraud. The company made a substantial $500,000 donation to the Red Sox Foundation and the Jimmy Fund just two months after the spinout.

— Bridget Botelho is a freelance writer in Providence, R.I.

Category

Top Recapitalization/Financing Deals

The Deal

Tyco International Ltd. spins out its Tyco Healthcare division into Covidien Ltd., instantly creating the largest medical technology firms in New England. Closed on June, 29, 2007.

Key Executives

Richard J. Meelia, president and CEO; Charles J. Dockendorff, CFO; José (Joe) E. Almeida, president, medical devices; John H. Masterson, general counsel; Amy A. Wendell, senior vice president of strategy and business development.

Deal advisers

Legal: Gibson, Dunn & Crutcher LLP.
Financial: Morgan Stanley; The Goldman Sachs Group Inc.

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