Medtronic goes under the knife again

Five months ago Medtronic cut off some of its slower-growing tech; now the axe has fallen again. Yesterday the world’s largest medtech said it would spin off of its sluggish patient monitoring and respiratory interventions businesses into a new company within the next 18 months. These units include various ventilators and laryngoscopy systems, and pulse oximetry and brain monitoring techs. Combined, these units generated global revenue of around $2.2bn in Medtronic’s fiscal 2022, which ended in April this year, and employ more than 8,000 workers. Medtronic says their combined revenue growth “sits below the company average”, but according to Evaluate Medtech, the sellside forecasts these units’ sales to shrink 2% annually out to 2028. The only segments set to shrink faster are Kanghui, which houses the products obtained via the 2012 acquisition of the orthopaedics specialist China Kanghui Holdings, and Medtronic’s ear, nose and throat business. The latter is forecast to contract 13% per year to 2028, data compiled by Evaluate Medtech show, despite Medtronic’s acquisition of Intersect ENT, which closed in May. Perhaps the ENT unit might be the subject of a future divestment.