Covidien Still Hungry For GI After Barrx Buy

Just as it did with VNUS, Covidien snapped up a smaller leader in a field where it had very little contact – esophageal cancer and its precursor Barrett’s esophagus – with the intent of building a larger presence. Covidien paid $325 million for Barrx Medical Inc., developer of a radiofrequency tool capable of eliminating Barrett’s, a condition in which damaged esophageal tissue presents an elevated risk of developing into esophageal cancer.

Two years ago, Covidien PLC entered the vascular market with the acquisition of VNUS Medical Technologies Inc., [See Deal] a publicly held maker of devices to treat venous reflux disease. Covidien paired the company with the smaller purchase of Bacchus Vascular Inc., [See Deal] housing both in a new global business unit focused on the area. (See A#2009800084].) The acquisition of VNUS for $470 million represented a modest first step and positioned Covidien to take its next leap, the $2.5 billion acquisition of vascular company ev3 Inc. in 2010. [See Deal] Together, the vascular business brought in $1.4 billion in sales in 2011, a 76% jump over the previous year’s business. (See Also see "Covidien Runs Familiar But Different Plays to Build Vascular Franchise" - In Vivo, 1 June, 2010..)

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