• Adds significant scale to vascular platform with strong market positions
• Provides broad product portfolio and robust pipeline in high-growth market segments
• Leverages global infrastructure, physician education and training expertise

Covidien and ev3 Inc. announced that they have signed a definitive merger agreement under which Covidien will acquire all of the outstanding shares of ev3 Inc. for $22.50 per share in cash, for a total of $2.6 billion, net of cash acquired. This transaction further accelerates Covidien's strategy of building a world-class vascular platform addressing high-growth markets and positions Covidien to become a leading endovascular player, with strong positions in both the peripheral vascular and neurovascular markets.

"The acquisition of ev3 will enable Covidien to significantly expand its presence in the vascular market and is in line with our strategy of becoming a leading partner with vascular surgeons, neurosurgeons, interventional cardiologists and interventional radiologists," said Richard J. Meelia, Chairman, President and CEO of Covidien. "With its broad product portfolio, clinical expertise and call-point synergies with our existing vascular franchise, ev3 will be an important addition to our innovative vascular intervention products."

"We believe this transaction will provide truly unique opportunities and will create value for both companies' stockholders, patients and employees," said Robert Palmisano, President and CEO of ev3. "We will be able to advance our broad platform of peripheral vascular and neurovascular technologies with a leading global healthcare products company that shares our vision of delivering breakthrough and innovative medical solutions for improved patient outcomes. In addition, this combination will provide the opportunity for further innovation to support endovascular market growth and procedure penetration worldwide, while our employees will be afforded the opportunity to be part of a larger organization with greater depth of resources for sustained success in our industry."

ev3 Inc. is dedicated to developing innovative, breakthrough and clinically proven technologies and solutions for the treatment of peripheral vascular and neurovascular diseases. ev3 offers a comprehensive portfolio of treatment options, including the primary interventional technologies used today: peripheral angioplasty balloons, stents, plaque excision systems, embolic protection devices, liquid embolics, embolization coils, flow diversion, thrombectomy catheters and occlusion balloons.

Financial Highlights

Under the terms of the agreement, Covidien will pay $22.50 in cash per ev3 share for a total of approximately $2.6 billion, net of cash acquired. The combination with ev3 will provide an additional growth platform for Covidien and is expected to be accretive to both revenue and earnings growth rates.

The transaction, which will take the form of an all-cash tender offer by a wholly-owned subsidiary of Covidien, followed by a second-step merger, is subject to customary closing conditions, including receipt of certain regulatory approvals, and is expected to be completed by July 31, 2010. The Boards of Directors of both companies have unanimously approved the transaction. All of the directors and executive officers of ev3 have confirmed their intention to tender all shares held by them into the offer, and certain stockholders affiliated with Warburg, Pincus Equity Partners LP, holding approximately 24% of ev3's outstanding common stock, have entered into agreements with Covidien to tender their shares. Once the transaction has been completed, Covidien will report ev3 as part of its Vascular Products line in the Medical Devices business segment.

Assuming a closing on July 31, 2010, Covidien expects that this transaction, on a GAAP basis, will dilute 2010 and 2011 earnings per share. On a Non-GAAP basis, excluding transaction, restructuring and other costs, Covidien expects this transaction to dilute fiscal 2010 earnings per share by 5 to 8 cents; however, the underlying strength of Covidien's existing businesses is expected to offset a portion of this dilution. Covidien expects fiscal 2011 Non-GAAP earnings per share to be diluted by approximately 10 to 15 cents, primarily due to higher depreciation/amortization, interest and income tax expenses.

Covidien intends to finance the transaction through a combination of cash on hand, commercial paper and a fully committed bridge facility.

Covidien will hold a conference call and web cast with investors today at 8:00 a.m. ET to discuss this announcement. Call details can be found later in this release.

About Covidien

Covidien is a leading global healthcare products company that creates innovative medical solutions for better patient outcomes and delivers value through clinical leadership and excellence. Covidien manufactures, distributes and services a diverse range of industry-leading product lines in three segments: Medical Devices, Pharmaceuticals and Medical Supplies. With 2009 revenue of $10.7 billion, Covidien has 42,000 employees worldwide in more than 60 countries, and its products are sold in over 140 countries. Please visit www.covidien.comto learn more about our b