Covidien To Sell Specialty Chemicals Business

Covidien has entered a definitive agreement to sell its Specialty Chemicals business to an affiliate of New Mountain Capital, for $280 million in cash. The decision is part of Covidien’s strategy to streamline its portfolio and reallocate resources to its faster-growing, higher-margin businesses.

Covidien’s Specialty Chemicals business, headquartered in Phillipsburg, NJ, manufactures and markets high-purity chemicals and related products and services under J.T.Baker and Mallinckrodt Laboratory Chemicals. These products are used in research and quality control labs, microelectronics, environmental testing labs and universities, and for manufacturing in the pharma/biopharma and other industrial markets. In 2009, sales of the Specialty Chemicals product line were $414 million and for the first six months of fiscal 2010, sales were $216 million.

The transaction, subject to customary closing conditions, is expected to close by the end of fiscal 2010.