COV/MDT
Medtronic Inc.
Healthcare
10/27/2014
Presented
| Date | 10/24/2014 |
| Price | $66.56 |
| Market Cap | $65.20B |
| Ent Value | $64.03B |
| P/E Ratio | 27.07x |
| Book Value | $19.75 |
| Div Yield | 1.6% |
| Shares O/S | 979.52M |
| Ave Daily Vol | 9,000,000 |
| Short Int | 7.59% |
Current
| Price | $89.84 |
| Market Cap | $115.22B |
| Medtronic, Inc. manufactures and sells device-based medical therapies worldwide. It operates through three segments: Cardiac and Vascular Group, Restorative Therapies Group, and Diabetes Group. The Cardiac and Vascular Group’s products include pacemakers; insertable cardiac monitors; implantable defibrillators; leads and delivery systems; ablation products; electrophysiology catheters; products for the treatment of atrial fibrillation; information systems for the management of patients with cardiac rhythm disease management devices; products to reduce surgical site infections; coronary and peripheral stents and related delivery systems; therapies for uncontrolled hypertension; endovascular stent graft systems; heart valve replacement technologies; cardiac tissue ablation systems; and open heart and coronary bypass grafting surgical products. The Restorative Therapies Group offers products for various areas of the spine; bone graft substitutes; biologic products; trauma, implantable neurostimulation therapies, and drug delivery systems for the treatment of chronic pain, movement disorders, obsessive-compulsive disorder, overactive bladder, urinary retention, fecal incontinence, and gastroparesis; products to treat conditions of the ear, nose, and throat; and systems that incorporate advanced energy surgical instruments. It also manufactures and sells image-guided surgery and intra-operative imaging systems. The Diabetes Group’s products include insulin pumps; continuous glucose monitoring systems; insulin pump consumables; and Web-based therapy management software solutions. The company serves hospitals, physicians, clinicians, and patients in approximately 140 countries. Medtronic, Inc. was founded in 1949 and is headquartered in Minneapolis, Minnesota. |
Publicly traded companies mentioned herein: AbbVie Inc (ABBV), Covidien plc (COV), Medtronic Inc (MDT), Shire plc (SHP LN / SHPG)
Highlights
Aside from a combined Medtronic (MDT)/ Covidien (COV) being a very interesting opportunity on the long side longer-term, the presenter is long shares of COV because the spread has widened to 11-12% in the wake of the turmoil surrounding the Treasury/ IRS rule changes for inversions. Generally speaking, the Treasury’s published interpretations are aggressive, and materially impact companies’ ability to invert. However, MDT has reaffirmed its funding and plans to proceed post the September 22 Treasury announcement, and the three month IRR is roughly 30-40%, depending on how long it takes for the companies to complete the acquisition.
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