BOSTON (AP) -- Medical device maker Orthofix International NV said it has sold its vascular business to Covidien PLC and plans to use proceeds from the sale to pay down debt.
Orthofix said Monday that it expects net cash proceeds of up to $19 million, which will be used to reduce long-term debt by about 7 percent. CEO Alan Milinazzo said in a statement that the deal will help focus Orthofix on market segments that show long-term growth potential.
The sale includes Orthofix's AV-Impulse mechanical compression technology. Orthofix, which is based in the Netherlands Antilles, will also provide transitional services to Covidien, based in Dublin, Ireland, for up to five months.
Orthofix, which operates in the U.S., U.K., Italy and other locations, increased its 2010 earnings guidance to $2.24 to $2.28 per share based on the deal.
U.S.-traded shares of Orthofix and Covidien rose in Tuesday morning trading. Orthofix added 15 cents to $35.89, while Covidien climbed $1.44, or 2.9 percent, to $51.80.