Medtronic to acquire MiniMed and MRG for $3.7 billion

Medtronic has signed an agreement to acquire MiniMed, which claims tobe the world leader in the development and marketing of advanced medical systems for the treatment of diabetes, and Medical Research Group, a privately-run concern that designs and manufactures implantable technologies related to pumps and sensors, also used primarily for the treatment of diabetes.

The deal, valued at $3.7 billion, involves Medtronic paying $48 per share, or $3.28 billion, for MiniMed and approximately $420 million in cash and stock for MRG. The amount being paid for MiniMed represents a 9.1% premium over its closing price on May 29.

Art Collins, Medtronics' chief executive, said the acquisitions "give additional momentum to both our short- and long-term strategies for growth," adding that MiniMed's market leadership in diabetes management offers immediate opportunities for reaching an expanding market that includes more than 16 million people in the USA. MiniMed, headquartered in Northridge, California, and founded in 1983, employs 1,600 people. The firm's revenues have risen at a 43% compounded annual growth rate from $99.5 million in 1997 to $294 million last year. During the same period, earnings rose from $6.7 million to $43.2 million.