The Work

December 15, 2011 6:48 PM

Wachtell Advising Covidien on Pharmaceutical Spin-Off

Posted by Brian Baxter

Covidien said Thursday that it plans to spin-off its pharmaceutical business and sharpen its focus on the medical device market.

The Dublin-based health care company is a former Tyco International company that was peeled off from the conglomerate in 2007. Reuters reports that Covidien's drug business generates about $2 billion in annual sales, while medical products account for $9.6 billion.

Wachtell, Lipton, Rosen & Katz corporate partners Adam Emmerich and Benjamin Roth are leading a team from the firm advising Covidien on the matter. Emmerich and Wachtell previously advised Covidien on its tax-saving move to establish Irish residency following the spin-off from Tyco, SEC filings show.

Emmerich is no stranger to spin-offs. He is also advising MetLife as it explores making a similar move with its banking business, according to our previous reports. For the Covidien matter, Emmerich—the brother of actor Noah Emmerich—is working with an in-house team that includes Covidien general counsel John Masterson, deputy general counsel John Griffin, corporate secretary John Kapples, chief M&A counsel Matthew Nicolella, and general counsel for pharmaceuticals Peter Edwards.

Masterson, a former junior partner at Boston's Nutter McClennen & Fish, became the company's top lawyer in 1999 when it was known as Tyco Healthcare, prior to its separation from its former parent. In September, Tyco announced that it would restructure again, separating into three publicly traded companies, according to our previous reports.

Covidien's spin-off would result in a tax-free distribution of stock to shareholders, which may take up to 18 months to complete, according to a press release issued by the company. While Covidien is the latest in a string of health care companies seeking to shrink, it has also been busy in recent years bolstering its presence in the more profitable medical device sector.

Covidien, which is based in Dublin but has its main office in Mansfield, Massachusetts, turned to Boston-based Am Law 100 firm Ropes & Gray last year for its $2.6 billion acquisition of medical device manufacturer ev3 and in 2009 for its $210 million purchase of brain monitoring technology company Aspect Medical Systems. Ropes & Gray also represented Covidien in August when it inked a five-year senior credit agreement.


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