Medtronic sells line of surgical tools

Medtronic Inc. announced plans Wednesday to sell off a line of 4,000 surgical tools, and the French factory that makes them, to a competitor in New Jersey.

Integra LifeSciences of Plainsboro, N.J., will pay $60 million for Medtronic's MicroFrance line of surgical tools. The tools consist of handheld reusable surgical instruments used in ear, nose and throat surgeries and laparoscopic procedures.

The deal includes the MicroFrance and Xomed product lines, as well as a manufacturing facility in St. Aubin le Monial in central France.

"Our ENT division is increasingly focusing on novel therapies and innovative powered surgical, navigation and nerve monitoring technologies," Medtronic spokeswoman Cindy Resman said in an e-mail. "As such, manual instrumentation is no longer a part of our longer-term strategy."

Although the deal comes amid Medtronic's proposed $43 billion acquisition of Irish surgical supplier Covidien PLC, officials at the Fridley-based medical device giant said the timing of the two deals involving surgical suppliers is coincidental.

One analyst, Jason Lau of Decision Resources Group, noted that the sale of MicroFrance fits with a strategy of moving toward fast-growth surgical tools like balloon sinuplasty and away from slower-growth areas like manual surgical tools.

Earlier this month, Medtronic announced the launch of the NuVent EM Sinus Dilation device for its Fusion ENT Navigation System, which uses electromagnetic imaging in a novel way to better position balloons used to dilate sinuses during surgery to treat chronic sinusitis.

Officials with Medtronic said the sale of MicroFrance to Integra was unrelated to their ongoing efforts to acquire Covidien, one of the world's largest suppliers of surgical instruments.

Although securities filings say Covidien competes with Medtronic for sales of some electrosurgical tools, analysts said there was little if any overlap among their discrete products. Although Covidien manufactures electrosurgical tools, for example, those devices aren't typically used in the ENT procedures for which MicroFrance tools are sold.

Resman said that until the Covidien deal is executed, the two companies would continue to operate independently.

The sale of the MicroFrance business to Integra is being financed by cash held outside the United States, according to the announcement of the deal. The deal is expected to close by the end the year, pending regulatory approval.