Covidien to Sell Mallinckrodt Baker

Covidien (Dublin, Ireland), a provider of healthcare products, will sell its Specialty Chemicals business, known in the industry as two brand names, J.T.Baker and Mallinckrodt Laboratory Chemicals to an affiliate of New Mountain Capital, L.L.C. for $280 million.

New Jersey-based Specialty Chemicals business manufactures and markets high-purity chemicals and related products and services. These products are used in research and quality control laboratories, microelectronics, environmental testing laboratories, and universities, and for manufacturing in the pharmaceutical, biotechnology, and other industrial markets.

Fiscal 2009 sales of the Specialty Chemicals product line were $414 million. For the first six months of fiscal 2010, sales of this product line were $216 million. Covidien will now report the Specialty Chemicals product line as a discontinued operation. The reclassification to discontinued operations will reduce the company's previously reported fiscal 2009 diluted earnings per share from continuing operations by approximately 7 to 8 cents.

Completion of the transaction is subject to customary closing conditions, with closing expected by the end of fiscal 2010. The transaction is expected to dilute reported earnings per share by approximately 9 to 11 cents in each of fiscal 2010 and fiscal 2011.