By Brad Perriello
Medtronic (NYSE:MDT) CEO Omar Ishrak said yesterday that the medical device titan is planning to use the billions in foreign cash it gained access to when it acquired Covidien to buy up early-stage technologies and add them to its product pipeline.
Fridley, Minn.-based Medtronic paid $50 billion for Covidien in January, allowing it to re-incorporate in Ireland. That, in turn, allows the company to spend the cash generated overseas without paying U.S. income tax on top of local taxes. Ishrak, discussing Medtronic’s 4th-quarter results with analysts yesterday, said some of that cash will go to acquiring medical device startups.
“We’re going to look at early technologies, in the U.S. primarily, where there maybe opportunities which we haven’t been able to participate in to the degree that we’d like to, to create a long-term technology pipeline of early-stage technologies that we think can make a difference,” Ishrak said.
Medtronic will still “opportunistically” look at larger buyouts, he added, “but that’s a matter of our overall financial bandwidth and our management bandwidth.”