Spun Out, Covidien Rolls On

Article preview from IN VIVO - May 2008

Covidien, nearly a year removed from spinning out of scandal-plagued parent Tyco International, is pushing forward as an independent company. Covidien execs are investing in new product creation, sales and marketing efforts, and acquisitions. That means Covidien is about to make a big splash in the device industry, with devices bringing in two-thirds of this ambitious company's revenues.

The former Tyco Healthcare has dedicated its first 10 months of independence to showing the world it's stronger than ever and ready to grow through internal innovation, significant investment, and, yes, some very key acquisitions.

• Covidien—now free from operating under a corporate parent—is pushing forward as an independent company.
• Covidien executives are building on a program of investing in new product creation, an effort to reverse years of underfunding research and development.
• Covidien is rolling out several new—and internally developed—products this year.
  At the same time, Covidien is in the market to acquire companies that fit into current businesses or help move those businesses toward adjacent markets.

Take a walk through the gleaming halls of Covidien Ltd.'s headquarters and you'll see no signs of its former life as Tyco HealthCare Inc. Covidien, less than a year removed from executing what was reportedly the largest health care spin-out in history, isn't scrubbing away any sign of a past relationship gone bad--notwithstanding the bruised reputation that its corporate parent earned several years ago when Tyco, along with companies like Enron Corp. and Global Crossing, became a poster child for corporate malfeasance. Rather, Covidien more closely resembles a young adult anxious to make its own name after years of residing under the control of an overshadowing parent.

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