A Medical Device Daily

Bristol-Myers Squibb (BMS; New York) reported that it will sell its Medical Imaging (MI) unit in Billerica, Massachusetts, to private equity firm Avista Partners for $525 million in cash.

The news comes just two scant weeks after the pharma giant presented a massive restructuring plan that would cut nearly 4,300 jobs worldwide, one-10th of its workforce; close more than half its manufacturing plants by 2010; and explore selling two other divisions, ConvaTec (Skillman, New Jersey), a wound-care products supplier, and its Mead Johnson Nutritionals (Evansville, Indiana) business.

"As Bristol-Myers Squibb continues to focus on evolving into a next-generation BioPharma company, we determined the best way to maximize the value of Medical Imaging for shareholders was to sell this business and reinvest the proceeds into our pharmaceutical research, development and commercialization efforts," said James Cornelius, CEO of BMS. "At the same time, we believe that Medical Imaging can maximize its potential under new ownership, and Avista has a proven track record of success in the healthcare field."

The transaction is expected to be complete by the end of January, subject to customary regulatory approvals, at which time BMS MI will operate as an independent company under a new name.

Don Kiepert, the founder and former president/CEO and chairman of Point Therapeutics (Wellesley Hills, Massachuestts), will become the CEO of the company.

"I am thrilled to be partnering with the existing management team of BMS MI and Avista Capital as we transition BMS MI to an independent company," said Kiepert.

This purchase marks Avista's sixth investment in the healthcare industry. The private equity firm recently purchased the fluid management and access businesses of Boston Scientific (Natick, Massachusetts) for $425 million.

Also in 2007, Avista made healthcare investments in BioReliance (Rockville, Maryland) and VWR International (West Chester, Pennsylvania) and in 2006 it reported investments in Nycomed (Zurich, Switzerland) and MedServe (Bellaire, Texas).

J.P. Morgan Securities served as financial advisor for BMS; Cravath, Swaine & Moore served as legal counsel for the company. Weil, Gotshal & Manges served as legal counsel for Avista.

BMS MI is a supplier of medical imaging products for nuclear and ultrasound cardiovascular diagnostic imaging procedures.

First Quality Enterprises (Great Neck, New York) and Covidien (Hamilton, Bermuda) reported that the companies have entered an agreement in which First Quality will acquire Covidien's Retail Products business (King of Prussia, Pennsylvania) for about $335 million, subject to certain adjustment provisions.

Covidien's Retail Products unit had sales of $744 million in FY07. The transaction, which is subject to customary closing conditions, is expected to be completed in 1Q08.

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 markets. 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, it said. First Quality said the acquisition will 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."

Richard Meelia, president/CEO 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 1Q08, 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.