April 5 (Bloomberg) -- Covidien Plc agreed to buy Oridion Systems Ltd., an Israeli maker of devices for patient breathing safety, for $346 million.
Covidien will pay about 21.08 Swiss francs ($23) a share, Jerusalem-based Oridion said today in a statement, 75 percent more than Oridion’s closing price yesterday. Oridion rose 71 percent to 20.50 francs at 4:50 p.m. in Zurich, where the company is listed on the Swiss stock exchange. Covidien, which is based in Dublin and run from Mansfield, Massachusetts, fell 0.5 percent to $53.565 in New York.
The acquisition will add to Covidien’s portfolio of devices for monitoring people’s respiratory functions, Robert J. White, president of Respiratory & Monitoring Systems at Covidien, said in the statement. Oridion had $64.5 million of revenue in 2011.
Covidien doesn’t expect the transaction to affect fiscal 2012 sales, operating margin or earnings per share, the company said. The boards of both companies have cleared the deal, which is subject to Oridion shareholders’ approval, it said.
Oridion, which has another headquarters in Needham, Massachusetts, said it had net income of $6.5 million last year. The company, founded in 1987, makes medical devices that monitor carbon dioxide in a patient’s breath for critical care or post-anesthesia care.
The merger may add competition for medical device developer Masimo Corp., which as of now has distribution agreements with Oridion, Joanne Wuensch, an analyst with BMO Capital Markets in New York, wrote in a note today.
“Covidien has proven itself extremely capable of integrating acquisitions and leveraging acquired technology while increasing margins, and Oridion should fit nicely into the company’s patient monitoring business,” she added.
Masimo fell 0.8 percent to $22.99 in New York trading.
The transaction will help Oridion expand more quickly, Alan Adler, the company’s chairman, said in a phone conference.
JPMorgan Chase & Co. acted as financial adviser to Oridion and Barclays Plc advised Covidien, Adler said.
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