Covidien — Merger or Acquisition (October 2014)
20 slides from Covidien's merger presentation, Oct 3, 2014
Slide 1: A Compelling Acquisition to Accelerate Medtronic's Growth Strategies
Filed by Medtronic, Inc. (SEC File No.: 001-07707) pursuant to Rule 425 under the Securities Act of 1933 and deemed filed pursuant to Rule 14a-12 under the Securities Exchange Act of 1934 Subject Company: Covidien plc Form S-4 File No.: 333-197406 Date: October 3, 2014 A Compelling Medtronic’s Updat
Slide 2: Cautionary Statements Regarding Forward-Looking Statements
NOfactors This vote securities IMPORTANT be AND BE MEDTRONIC, documents preliminary investor.relations@medtronic.com by PARTICIPANTS Medtronic, Medtronic solicitation set fiscal Covidien’s Cautionary Statements looking words words, of with benefits further contacting forth FILED OFFER or communicati
Slide 3: Forward-Looking Statements and Irish Takeover Rules
are the for the variability potential availability Medtronic’s, policy transaction and Covidien’s other STATEMENTS Responsibility The that Dealing Under ‘relevant securities’) becomes securities’ not medical such directors investor the changes; acquisition anticipated; Disclosure effective for other
Slide 4: Additional Notices and Non-GAAP Information
Under either A arise, ownership Terms Rule No those Appendix General from certain The relating (including, permitted Any Shareholders All NOT RELEVANT disclosure Profit statement Non-GAAP release, response 8, PricewaterhouseCoopers FOR for in of in the expressions merger please to summary, them, quo
Slide 5: Compelling Medtronic and Covidien Combination
Significant Highly •Creates Combined Accelerates Combination Covidien’s Extremely Strategic thecompany benefits Premier attractive impressive hospital Medtronic’s ofand Covidien’s for Global expected Compelling efficiency financially: both portfolio three Medical MEDTRONIC extensive tocore technolog
Slide 6: Creates Global Leadership in Medical Technology
CREATES LTM $5.9 $2.8 GLOBAL LEADERSHIP #2 #1 STRONG Spinal Insulin Compression EMERGING 321growing Amounts Revenues Last inBillion2 Billion1 ADJ REVENUES Coronary Endovascular Structural Spine Neuromodulation Surgical Diabetes Peripheral Neurovascular Respiratory Medical 12 Cord Pumps, mid-teens mo
Slide 7: Key Strategic Priorities: Therapy Innovation, Globalization, Economic Value
Covidien Therapy launch Globalization: Economic cadence Innovation: Significantly Value: Addressing ofBecoming meaningful Delivering advances thea leader inequity therapies strong Medtronic’s in in value-based and healthcare procedures KEY Strategic healthcare access globally Priorities by incorpora
Slide 8: Covidien Enhances Therapy Innovation
THERAPY COVIDIEN Covidien Enhances developing Existing Advanced Complementary Adds minimally-invasive Clinical New Covidien’s Therapeutics patient Greater Areas Portfolio Neurovascular: and Energy: New Medtronic INNOVATION ADVANCES monitoring Development Breadth Accelerates Peripheral portfolio Ther
Slide 9: Covidien Accelerates Globalization Strategy
Strategically COVIDIEN LEADING, $3.7 Other Central China East. Latin America & FY14 Respiratory $2.1B Surgical major Solutions Cardiac Diabetes 1Restorative Therapies Amounts Vascular Africa billion Europe EM manufacturing Asia GEOGRAPHIC BUSINESS provider China $3.7B1 $3.7B &&government Middle Vasc
Slide 10: Covidien Accelerates Globalization: Centers of Innovation
COVIDIEN Istanbul, location China Ablation Korea 2016 2015 2014 Aster Annapurna Hollyhocks Penguin Gem Emerald Cattleya Camellia-P1 India Brazil -Turkey and Expands Establishes Enhances Established Tailored 122 Main 55K Engineering Grand ISO 1FTE: 1Scheduled FTE scouting Engineering ft2 13485 ft2 Te
Slide 11: Covidien Enhances Our Ability to Deliver Economic Value
Significantly COVIDIEN Diagnostic, Chronic Value Robust Physicians Hospital Patients primarily and Disease Systems Payers Unmatched Surgical, ENHANCES increases realized and Governments Critical our Integrated inOUR ability Value Care ABILITY primarily to Therapies Health serveSolutions aTO realized
Slide 12: Transaction Overview – Terms
TRANSACTION –Terms Offer 1•shareholders Acquisition Formation Closing Subject Covidien $35.19 0.956 Based represents • shares Represents on in to expected shareholders Covidien cash Medtronic ofofof new Covidien anew OVERVIEW 29% in per Irish and late Medtronic and premium share to domiciled Medtron
Slide 13: Compelling Financial Impact and Shareholder Returns
COMPELLING DRIVING Much Revenue Significant At Cost Back Cash EPS GAAP Maintain 1.9x 3.7x Leverage Capital least Impact pro Synergies EPS office stronger EPS Allocation $850 forma Growth access accretive SIGNIFICANT revenue optimization, neutral • million Significant platform net gross to FINANCIAL
Slide 14: New Financing Plan
MEDTRONIC NEW (Announced $13.5 Medtronic, $2.8 Paid billion tobillion FINANCING Covidien Inc. inon intercompany new FINANCING raises October shareholders external MECHANISM approximately 3, 2014) loan debt PLANfromORIGINAL $16 Medtronic billion in FINANCING OUSnewsubsidiary externalMECHANISM debt
Slide 15: Strong Free Cash Flow Provides Greater Access to Capital
STRONG TRANSACTION Acquisitions 32Financially Committed U.S. R&D Return toFREE efficient shareholders toinvest, and Investing CASH venture PROVIDES innovate, structure an FLOW 1 Incremental investments and will GREATER GOING create provide $10 inlong-term FORWARD the ACCESS more Billion U.S. flexibi
Slide 16: Plan to Execute Integration Crisply
PLANIntegration Chief Assembled Integration Combine Remaining TOPeripheral CRISPLY team Covidien dedicated accountable preparing Officer Vascular business EXECUTE integration atplans senior for and units the to team INTEGRATION Neurovascular vice execute expected delivery made president upon up to o
Slide 17: Combination Results in Strategic Diversification
COMBINATION MEDTRONIC Coronary CRDM Airway Ortho/Spine 11.2% 2.8% Nursing 1.6% 3.7% 5.3% 7.1% Structural COVIDIEN General 4.4% Surgical Advanced 4.3% Diabetes 9.5% Patient 9.8% 7.7% Neuro Peripheral 111.8% LastAirway CRDM 17.9% 3.9% 6.1% 31.9% 12 Ortho/Spine $17.0B Care Monitoring &Care Tech $27.4B
Slide 18: Highly Compelling Benefits to Shareholders
HIGHLY BENEFITS More Diversifies Operational closing Cash 1Increases significantly Based component competitive, onSTRATEGIC access revenue Covidien TO synergies accretive BENEFITS to plus comprehensive capital mix and ability drive AND thereafter and Medtronic for •TO growth to Cash FINANCIALLY stra
Slide 19: Non-GAAP Reconciliation – Medtronic
NON-GAAP MEDTRONIC, RECONCILIATION NET, (in (Unaudited) Restructuring Certain Special Acquisition-related Earnings Interest Depreciation EDITDA FY14 117 40 770 $78 850 379 3,705 4,710 5,939 millions) SPECIAL litigation charges expense from excluding and RECONCILIATION charges, continuing INC. CHARGE
Slide 20: Non-GAAP Reconciliation – Covidien plc
NON-GAAP COVIDIEN Earnings (111) expense, Netnet from gain PLC 194 RECONCILIATION continuing onDepreciation RECONCILIATION investments operations (12) and TABLE amortization Loss before OF onEARNINGS –retirement income COVIDIEN 544 taxes Adjusted ofFROM debt $ 2,104 EBITDA 20CONTINUING Impact Restru