Covidien Acquires Vascular Firm ahead of Medtronic Merger

Nancy Crotti

August 25, 2014

2 Min Read
Covidien Acquires Vascular Firm ahead of Medtronic Merger

As it prepares for its $43 billion merger with Medtronic, Covidien has purchased a small California medtech company. The price was not disclosed.

Privately held Reverse Medical Corp. (Irvine, CA) makes devices to manage acute stroke and neurovascular disease. The company is marketing its vascular embolization plugs, the MVP Micro Vascular Plug System and the UNO Neurovascular Embolization System. MVP and UNO are self-expanding vessel occlusion devices that close blood vessels for vascular embolization.Such devices most often treat brain aneurysms to prevent bleeding in the problem area and reduce the risk of blood vessel rupture, according to the National Institutes of Health.

Reverse Medical also makes the ReVerse Microcatheter for device delivery and Barrel Vascular Reconstruction Device, a self-expandable, bifurcation, aneurysm-bridging device. All the devices have received the CE Mark and are commercially available in Europe.  MVP-3 and MVP-5 are 510(k)-cleared in the U.S.

Reverse Medical's neurovascular line will come under Covidien's existing neurovascular business, according to a statement by Covidien. Reverse Medical's president and CEO Jeffrey Valko said he could not comment further on the acquisition.

The purchase comes amid criticism of Fridley, MN-based Medtronic by President Obama, other U.S. politicians and Medtronic shareholders. The acquisition would allow Medtronic to save money on taxes by moving its headquarters from Minnesota to Ireland.

The tax inversion deal would cause the shareholders to exchange their present stock for stock in the new Ireland-based Medtronic plc, and in the process, they would be stuck with a surprise capital gains tax on all the extra value the stock gained over the decades.

Tax inversion transactions, which have been termed the "holy grail of tax avoidance" by a number of U.S. politicians, have picked up recently as a growing number of companies looks for ways to reduce their tax burden. As many as 25 U.S. companies are considering relocating their headquarters to low-tax destinations, according to the Irish Times.

Presidential, congressional and shareholder eyes are narrowing about the impending merger, as it would move Medtronic's headquarters to Covidien's home country Ireland, thus ducking higher U.S. taxes.

Nancy Crotti is a contributor to Qmed and MPMN.

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About the Author(s)

Nancy Crotti

Nancy Crotti is a frequent contributor to MD+DI. Reach her at [email protected].

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