Yahoo Finance Farallon Capital Increases Position in Covidien
Highlights of Farallon Capital Management's 4Q14 Holdings (Part 7 of 12)
Farallon Capital and Covidien Plc.
Farallon Capital Management increased its position in Covidien Plc. (COV) by more than $144 million. It represents 6.28% of the total portfolio in 4Q14, up from 5.06% in 3Q14. Farallon Capital had also increased its position in COV for 3Q14 (5.06%), compared to 2Q14 (2.86%).
COV has a 1.42% exposure to the Vanguard Health Care ETF (VHT), which tracks the overall performance of 326 publicly traded companies in the healthcare sector. The hedge fund also started a new position in another healthcare company, Actavis Plc (ACT).
Overview of Covidien
Ireland-based Covidien (COV) develops, manufactures, and sells healthcare products for use in clinical and home settings. It operates its businesses through the following two segments:
Medical Devices. This segment includes the development, manufacture, and sale of the following:
airway and ventilation products
endomechanical instruments
energy devices
oximetry and monitoring products
soft tissue repair products
vascular products
US Medical Supplies. This segment includes the development, manufacture, and sale of nursing care products, medical surgical products, SharpSafety products, and original equipment manufacturer (or OEM) products.
Covidien posts 1Q15 results
In January 2015, Covidien (COV) announced its 1Q15 results. The company reported net sales of $2.69 billion, an increase of 2% when compared to revenues of $2.64 billion for 1Q14. Operational sales growth for the quarter was 6%, since the foreign exchange rate movement reduced the quarterly sales growth rate by 4 percentage points.
Covidien chairman and CEO José Almeida noted, “We continued to perform strongly during the quarter, driven by considerable growth in Surgical Solutions, our largest product category, as well as important new offerings and a sustained focus on productivity improvement. We expect to maintain this solid performance as we continue to invest in and execute our global strategy.”
Medtronic acquires Covidien in January 2015
In January 2015, Medtronic (MDT) completed the acquisition of Covidien (COV). The cash and stock transaction was valued at approximately $49.9 billion. According to the acquisition agreement, Medtronic and Covidien will become wholly owned subsidiaries of Medtronic Plc, the new combined holding company.
This acquisition will help the company capture considerable market share in the United States and Europe. According to Medtronic chairman and CEO Omar Ishrak, “The culmination of this acquisition marks a significant milestone in our industry, creating a company uniquely positioned to alleviate pain, restore health, and extend life for more patients around the world. We can now bring together the extensive and innovative capabilities of both Medtronic and Covidien with an underlying objective to solve healthcare’s biggest challenge—expanding access and improving clinical outcomes, while lowering costs.”
Medtronic has an exposure of 0.59% to the SPDR S&P 500 ETF (SPY) and 4% exposure to the Health Care Select Sector SPDR Fund (XLV). XLV tracks the performance of 58 publicly listed companies in the healthcare sector.
The next article in this series explores Farallon Capital’s position in Dollar General.
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