Medtronic Buys Brain-Stimulation Firm for $200 Million

By Dow Jones Business News, 
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By Michael Calia

Medtronic Inc. ( MDT ) on Tuesday said it acquired privately held Sapiens Steering Brain Stimulation for about $200 million in cash, as the medical-devices maker looks to broaden its capabilities in the brain-function field.

Medtronic said the deal doesn't have an impact on its earnings guidance for fiscal year 2015.

Netherlands-based Sapiens is developing a deep-brain-stimulation system that would allow for more precise stimulation of intended targets in a patient's brain, according to Medtronic.

Sapiens and Medtronic will continue work on the project while beginning clinical research into integrating the technologies into Medtronic's existing portfolio.

"This acquisition broadens our neuroscience leadership position with innovative brain modulation technology that, along with our comprehensive portfolio of DBS solutions, may one day transform the way physicians are able to treat patients with neurodegenerative diseases like Parkinson's disease and essential tremor," Medtronic executive Lothar Krinke said in a news release.

The deal comes as Medtronic pursues the completion of its $42.9 billion deal to buy Covidien PLC (COV), which has come under scrutiny over a tax tactic called inversion that has drawn criticism from U.S. officials. Medtronic plans to relocate in Ireland, where the tax load for the company would be lighter than in the U.S., after it completes the Covidien transaction.

Write to Michael Calia at michael.calia@wsj.com

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