ev3 Inc. (EVVV) Signs Definitive Merger Agreement with Covidien (COV), Sparks Trading Flurry
Shares of ev3 Inc. (NASDAQ: EVVV) jumped more than 17% in today's trading. The stock reached a 52-week high of $22.27. At last check, it was up 17.49% to $22.23, with volume up from daily average of 832,000 to 31.07 million. Minnesota-based ev3 Inc. is a global endovascular company focusing on the identification and treatment of peripheral vascular disease.
ev3 stock spiked after the company announced that it has signed a definitive merger agreement with Covidien plc (NYSE: COV) under which Covidien will acquire all of ev3's outstanding shares for $22.50 per share in cash. The acquisition will give Covidien an additional growth platform. The deal is expected to be closed by July 31, 2010.
Commenting on the deal, Robert Palmisano, president and CEO of ev3, said that the deal is expected to provide unique opportunities and create value for both companies' shareholders, patients and employees. With the transaction, ev3 will be able to advance its broad platform of peripheral vascular and neurovascular technologies with a leading global healthcare products company, according to Palmisano.
Covidien, through a wholly owned subsidiary, will tender an all-cash offer for ev3, followed by a second-step merger. The board of directors for both companies has agreed unanimously to the deal, with ev3's directors and executive officers confirming their intention to tender all shares held by them to Covidien. Also, some of the shareholders affiliated with Warburg Pincus Equity Partners LP, holding around 24% of ev3's outstanding common stock, have agreed to tender their shares to Covidien. The deal will be financed by Covidien through cash on hand, commercial paper and a fully committed bride facility. On completion! of the transaction, ev3 will be part of Covidien's Vascular Products line in the Medical Devices business segment.
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