Covidien CEO Says Company Focused on Internal Growth
Covidien, formerly Tyco Healthcare, began trading last Thursday after being spun off from Tyco International. Covidien President and Chief Executive Rich Meelia joined “Squawk on the Street” to discuss his future plans and goals for the healthcare products maker.
“When we announced the separation (from Tyco International) about 18 months ago, we knew then that we would have the freedom to be able to be a little bit more aggressive with the management of the portfolio,” said Meelia. “As an independent healthcare company, we’ll be making investments that are appropriate, and we can work with the board to focus strictly on healthcare.”
Although the company will no longer be part of the much-larger Tyco, which has $43 billion in assets, Covidien pockets will be sufficiently deep, Meelia said. He expects the company to have a "very strong" balance sheet and to generate "strong" cash flows.
However, Covidien will be focused more on internal growth than making new acquisitions, he said.
“Our whole goal is to manage this diverse portfolio, which we think is a real asset for us, in a way that brings in elements that will increase returns on our investment capital,” he said.