Discovery Group Urges Given Imaging to Repurchase Shares and Pursue a Sale of the Company

  Discovery Group Urges Given Imaging to Repurchase Shares and Pursue a Sale
  of the Company

Business Wire

CHICAGO -- October 1, 2013

In a letter sent today to Given Imaging, one of its largest investors urged
the Board to implement a $50 million share repurchase and a subsequent sale of
the Company to a larger strategic buyer. According to Discovery Group’s
letter, a sale to a strategic buyer could be expected to achieve a value of
$26 to $30 per share.

Mark Buckley, a Partner with Discovery Group, said “a soon-to-be expiring tax
benefit allows the Company to return up to $50 million in excess cash to
shareholders.” According to Discovery Group, Given Imaging has until November
15, 2013 to take advantage of the “Trapped Profits Law” amendment to Israel’s
law governing the taxation of the Company. The letter notes that as of June
30, 2013, the Company has $130 million of idle cash.

Immediately following the share repurchase, the Board should initiate a
comprehensive sale process, says Discovery Group, asserting that Given Imaging
has been chronically undervalued in the public markets primarily due to

“Failed execution of its business strategy, weak financial performance, loss
of management credibility with investors, and an inefficient capital structure
have all contributed to the Company’s poor stock market performance,” added
Mr. Buckley.

Discovery Group has been an investor in Given Imaging since early 2011. The
institutional fund cites Given Imaging’s transformative and disruptive
technology and large untapped end-markets as reasons for its investment.

“We no longer believe Given Imaging can attain its true intrinsic value in the
public markets,” Buckley argues. “By returning excess cash to shareholders and
conducting a full auction process to sell the Company, the Board will remove
the execution risk that exists under the current management regime while
providing shareholders with an attractive return.”

Discovery Group’s letter to the Board of Directors of Given Imaging is
available at the SEC’s website and on Discovery Group’s website at

Discovery Group manages private partnerships in highly specialized investment
strategies. The business was founded in 2002 and is based in Chicago.
Investors in these funds include large university endowments,
nationally-recognized charitable foundations and a variety of trusts, family
offices and wealth advisors.


Discovery Group
Meghan O’Callaghan, 312.265-9596
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