Medtronic spends $500 million in European acquisitions

Medtronic has completed a $350 million acquisition of Italian company NGC Medical. Medtronic already held a 30% ownership stake in the company. NGC manages cardiovascular suites, operating rooms and intensive care units at nearly 30 hospitals across Italy and is rapidly expanding its service offerings throughout Europe, the Middle East and Africa. The acquisition of NGC adds an established hospital managed services capability to Medtronic's growing portfolio of efficiency solutions for hospitals, and enhances its ability to provide higher levels of economic value to physicians, payers and health systems.

The announcement comes a day after Medtronic revealed its plans to spend $200 million to buy a privately held Dutch company, Sapiens Steering Brain Stimulation, that develops deep brain stimulation technologies.

Rob ten Hoedt, executive vice president and president of Medtronic's EMEAC region, said: "I am delighted that NGC will join Medtronic and add to our growing offering to hospitals and health systems. As we are all acutely aware, current models of delivering healthcare are not sustainable, and Medtronic is intent on finding new ways to partner with physicians, hospital systems, patients, payers and governments around the world to meet their cost and access challenges and to deliver high quality healthcare.

“As the world's leading medical device manufacturer, we have the technology, expertise, broadest portfolio of products and therapies, and the financial strength to provide unique solutions to hospitals. Medtronic has made significant progress over the past year since launching our hospital solutions business. NGC's managed services expertise further enhances this momentum, making the combined entity an ideal partner for hospitals."

Paolo Cremascoli, CEO of NGC, said, "We are pleased to be part of Medtronic and to have the opportunity to apply the expertise, services and solutions we have developed over the past 30 years to a much broader group of hospitals and healthcare providers. As part of Medtronic's Hospital Solutions business we are well-positioned to help solve the challenges that healthcare systems are currently facing."

Over the past year, Medtronic Hospital Solutions has entered into partnerships with hospitals across Europe to provide hospital lab managed services and has been involved in a number of programs to increase efficiencies and improve the patient experience. Medtronic recently provided hospital efficiency solutions to Maastricht University Medical Center in The Netherlands that produced an estimated savings of €4.5 million (US $6 million) in one year. Through the Hospital Solutions business, Medtronic is able to provide solutions to help improve patient care and system efficiency through the company's integration of data, medical technology and services. These efforts also address and expand patient care pathways, potentially increasing access to care for patients. Medtronic remains committed to growing this business, both within Europe and in other regions around the world. In Europe Medtronic maintains numerous long-term contracts representing over a half billion dollars of revenue and are currently in discussions with an additional 150 healthcare systems around the world.

In June, Medtronic announced its intention to buy Covidien in a $42.9 billion cash-and-stock deal that would involve moving its executive offices to Ireland, where the company can benefit from that country's lower tax rates. Medtronic said shareholders will control the combined company, which will be led by current ceo Omar Ishrak. The combined company will keep its operational headquarters in Minneapolis.