First Quality to Acquire Covidien's Retail Products Business
Business Editors/Retail Writers
GREAT NECK, N.Y. & HAMILTON, Bermuda--(BUSINESS WIRE)--Dec. 17,
2007--First Quality Enterprises, Inc. ("First Quality") and Covidien
Ltd. (NYSE: COV, BSX: COV) today announced that the two companies have
entered into a definitive agreement under which First Quality will
acquire Covidien's Retail Products business for approximately $335
million, subject to certain adjustment provisions. Covidien's Retail
Products business, headquartered in King of Prussia, Pennsylvania, had
sales of $744 million in fiscal 2007. The transaction, which is
subject to customary closing conditions, is expected to be completed
in the first calendar quarter of 2008.
The First Quality group of companies is comprised of three
divisions - Absorbent Hygiene, Paper Products and Non-woven Material -
serving the healthcare, retail and commercial channels. With the
addition of Covidien's Retail Products business and its complementary
product lines, First Quality's Absorbent Hygiene business will have a
more diversified product portfolio and a full range of adult
incontinence, feminine hygiene, wet and dry wipes, and baby diaper
products. This acquisition will enable First Quality to enhance its
relationships with retail customers by offering broader, more
innovative product lines and greater value.
"The acquisition of Covidien's Retail Products business is a
compelling opportunity for First Quality," said Richard Martorella,
Director of Finance and Treasury of First Quality. "The addition of
Retail Products creates a more comprehensive Absorbent Hygiene
business, solidifying First Quality's position in our three core
areas. Together, the First Quality Absorbent Hygiene division will
provide customers with a full suite of premium products serving the
infant care, adult incontinence and feminine hygiene segments. We
welcome Covidien's Retail Products business and its hardworking and
dedicated employees to the First Quality family."
Richard J. Meelia, President and Chief Executive Officer of
Covidien said, "Retail Products has been part of Covidien for nearly a
decade and has a workforce committed to delivering high-quality
products to North American retailers. Following a thorough review and
evaluation of strategic alternatives for the business, we determined
that the unique characteristics of Retail Products did not fit with
Covidien's goal to be the leading global healthcare products company.
This transaction is consistent with Covidien's strategy to focus its
portfolio and reallocate resources to its core healthcare business. We
look forward to working closely with First Quality's talented team and
we anticipate a smooth transition."
Beginning in the first quarter of fiscal 2008, Covidien will
report the Retail Products business as a discontinued operation.
Goldman, Sachs & Co. served as financial advisor to First Quality
and Morgan Stanley served as financial advisor to Covidien.
ABOUT FIRST QUALITY ENTERPRISES, INC.
Founded in 1990, First Quality Enterprises, Inc. and its
affiliates are a closely-held diversified group of companies
manufacturing, selling and distributing branded and private label
absorbent hygiene, paper and non-woven products into the healthcare,
retail and commercial channels. First Quality is dedicated to meeting
the demands of the market by providing innovative and high-quality
products manufactured utilizing state of the art technology. For more
information please visit www.firstquality.com.
ABOUT COVIDIEN
Covidien is a leading global healthcare products company that
creates innovative medical solutions for better patient outcomes and
delivers value through clinical leadership and excellence. Covidien
manufactures, distributes and services a diverse range of
industry-leading product lines in five segments: Medical Devices,
Pharmaceutical Products, Imaging Solutions, Medical Supplies and
Retail Products. With 2007 revenue of $10 billion, Covidien has more
than 43,000 employees worldwide in 57 countries, and its products are
sold in over 130 countries. Please visit www.covidien.com to learn
more about our business.
FORWARD-LOOKING STATEMENTS
Any statements contained in this press release that do not
describe historical facts may constitute forward-looking statements as
that term is defined in the Private Securities Litigation Reform Act
of 1995. Any forward-looking statements contained herein are based on
our management's current beliefs and expectations, but are subject to
a number of risks, uncertainties and changes in circumstances, which
may cause actual results or Company actions to differ materially from
what is expressed or implied by these statements. The factors that
could cause actual future results to differ materially from current
expectations include, but are not limited to, risks and uncertainties
relating to satisfaction of closing conditions related to the Retail
Products business transaction, the integration of businesses we have
acquired or may acquire in the future, changing technologies, product
development and market acceptance of our products, the cost and
pricing of our products, manufacturing, competition, customers'
capital spending and government funding policies, changes in
governmental regulations, the use and protection of intellectual
property rights, litigation and exposure to foreign currency
fluctuations. These and other factors are identified and described in
more detail in our filings with the SEC. We disclaim any obligation to
update these forward-looking statements other than as required by law.
CONTACT: For Covidien
Eric Kraus, 508-261-8305
Senior Vice President
Corporate Communications
eric.kraus@covidien.com
or
Coleman Lannum, CFA, 508-452-4343
Vice President
Investor Relations
cole.lannum@covidien.com
or
Bruce Farmer, 508-452-4372
Director
Financial Communications
bruce.farmer@covidien.com
or
Wayde McMillan, 508-452-4387
Director
Investor Relations
wayde.mcmillan@covidien.com
or
For First Quality
Joele Frank, Wilkinson Brimmer Katcher
Matthew Sherman, 212-355-4449
or
Joele Frank, Wilkinson Brimmer Katcher
Jennifer Schaefer, 212-355-4449
or
Joele Frank, Wilkinson Brimmer Katcher
Marin Kaleya, 212-355-4449
