Medtronic to spin off 2 businesses

Spinal Tech

Medtronic plans to separate its combined patient monitoring and respiratory interventions businesses, which are part of the company's medical surgical portfolio.

The planned spinoff, NewCo, will allow for greater investment focus in the areas of "highest strategic priority" and help execute Medtronic's leadership strategy in attractive medtech markets, the company said in an Oct. 24 news release

"Independently, NewCo will be a leading connected care company with a compelling leadership position, attractive margins, and potential for growth acceleration with increased investment and dedicated capital allocation," said Geoff Martha, chair and CEO of Medtronic. "Looking ahead, we remain focused on active portfolio management with an ongoing process of evaluating potential additions and subtractions to further accelerate Medtronic's growth over the long-term."

Following the separation of NewCo, Medtronic said it will have:

- A more streamlined portfolio with increased focus on investing capital into opportunities that align with its long-term growth strategies.
- Modestly faster organic revenue growth and an increased weighted average market growth rate.
- A strong balance sheet and continued commitment to its strategy of driving durable growth.

The patient monitoring technology portfolio includes Nellcor pulse oximetry, Microstream capnography, BIS brain monitoring, Invos perfusion monitoring, and HealthCast connected care platforms. The respiratory interventions technology portfolio includes Puritan Bennett ventilators, Shiley airway portfolio, McGrath Mac video laryngoscopy, DAR breathing systems, as well as ventilation software systems designed to improve workflow and care delivery.

The patient monitoring and respiratory interventions, part of the respiratory, gastrointestinal and renal division, generated global revenue of about $2.2 billion in fiscal year 2022. The business comprises more than 8,000 employees worldwide.

Medtronic expects the separation to be completed in the next 12 to 18 months subject to certain closing conditions. The company plans to redeploy net proceeds consistent with its stated capital allocation priorities and does not expect the spinoff to affect its dividend policy.

Medtronic said it will provide more details on the transaction at a later date. 

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