Covidien to Acquire Aspect Medical Systems Inc.

Covidien and Aspect Medical Systems, Inc. announce that Covidien has reached a definitive agreement to acquire Aspect, a global market leader in brain monitoring technology.

The Boards of Directors of both companies have unanimously approved the transaction, pursuant to which a wholly owned subsidiary of Covidien will pay $12.00 in cash per Aspect share for a total of approximately $210 million, net of cash and short-term investments acquired. The transaction, which will take the form of an all cash tender offer 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 the end of calendar 2009.

Founded in 1987, Aspect is recognized as a pioneer and global market leader in brain monitoring, with 2008 revenues of $99 million. Aspect’s premier product - Bispectral Index (BIS) technology - became the first clinically proven and commercially available direct measure of the effects of anesthetics and sedatives on the brain. Aspect led the way to develop proprietary technologies that directly measure these effects and ultimately improve the quality and cost effectiveness of patient care. BIS technology is designed to allow medical professionals to reliably gauge the precise amount of anesthetic medication required by each patient, resulting in better overall patient care.

“The acquisition of Aspect will allow Covidien to broaden its product offerings and add a market leading brain monitoring technology to its portfolio,” says Pete Wehrly, president, Respiratory & Monitoring Solutions, Covidien. “Aspect will bring us enhanced clinical expertise, a strong research & development organization and expand our presence in the operating room. The acquisition is consistent with our strategy of expanding into adjacent market segments and will help us achieve our mission of enhancing the quality of life for patients and improving outcomes for our customers.”

“Joining Covidien provides Aspect with the scale and resources to accelerate growth of BIS and other Aspect products, to continue to invest in outcomes research, comparative effectiveness and innovation, and to support the strategy of providing products that are designed to improve patient outcomes,” says Nassib Chamoun, president and CEO, Aspect Medical Systems. “Above all, we are pleased to become part of a company that shares our commitment to evidence-based medicine and the development of products that help clinicians cost-effectively deliver better care.”

Assuming a December 31, 2009, closing, Covidien expects this transaction to dilute fiscal 2010 GAAP earnings per share, primarily due to a one-time charge for restructuring. On a non-GAAP basis, excluding the restructuring charge, the transaction is expected to be slightly dilutive to 2010 earnings per share; however, the underlying strength of Covidien’s existing businesses is expected to offset this dilution. As a result, Covidien does not anticipate this transaction will have a material impact on its fiscal 2010 sales or operating margin outlook.

Once the transaction has been completed, Covidien will report the Aspect business as part of its Oximetry and Monitoring product line in the Medical Devices segment.

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 2008 revenue of $10 billion, Covidien has more than 41,000 employees worldwide in 59 countries, and its products are sold in over 140 countries. Please visit www.covidien.com to learn more about our business.

ABOUT ASPECT MEDICAL SYSTEMS, INC.
Aspect Medical Systems, Inc. is a global market leader in brain monitoring technology. To date, the Company's Bispectral Index (BIS) technology has been used to assess approximately 34 million patients and has been the subject of more than 3,300 published articles and abstracts. BIS technology is installed in approximately 78 percent of hospitals listed in the July 2009 U.S. News and World Report ranking of America's Best Hospitals and in approximately 74 percent of all U.S. operating rooms. In the last twelve months, BIS technology was used in approximately 19 percent of all U.S. surgical procedures requiring general anesthesia or deep sedation. Aspect Medical Systems has OEM agreements with nine leading manufacturers of patient monitoring systems. For more information, visit Aspect's Web site at http://www.aspectmedical.com.