Medtronic (NYSE:MDT) said on Monday it would spin off its patient monitoring and respiratory interventions businesses into a new company, as it seeks to have a more streamlined portfolio and faster revenue growth.
The separation, expected to be completed in the next 12 to 18 months, will also help the company to unlock value from the two divested businesses, Medtronic said.
The patient monitoring technology portfolio includes Nellcor pulse oximetry and BIS brain monitoring, while the respiratory interventions business comprises ventilators and breathing systems.
The two businesses generated about $2.2 billion in the fiscal year ended April 29 and has more than 8,000 employees globally.
Medtronic, the world’s largest standalone medical device maker, has been restructuring its business over the last few years. In 2018, the company announced a restructuring plan expected to help them save $500 million to $700 million annually over five years.
U.S. companies such as Johnson & Johnson (NYSE:JNJ), General Electric (NYSE:GE) and 3M (NYSE:MMM) have been breaking up their businesses amid a growing consensus they perform best with streamlined focus, along with increasing pressure from activist investors to boost shareholder returns.
Medtronic, like many medical device makers, has been facing supply chain shortages and rising costs, exacerbated by the Ukraine conflict and strict Covid-19 lockdowns in China.
Shares of Medtronic were up 42 cents to $83.68 in early Monday trade.
