Medtronic has announced its plans to separate its combined Patient Monitoring and Respiratory Interventions businesses into a new company, dubbed NewCo.

The medical technology company said that its decision to spin off the combined businesses is part of its ongoing portfolio assessment.

The separation is expected to strengthen the strategic and operational focus, portfolio management and capital allocation strategies, and long-term value creation for both Medtronic and NewCo.

The spin-off is expected to be completed within 12 to 18 months, subject to certain closing conditions, including final approval from the Medtronic Board of Directors and other regulatory approvals.

Medtronic chairman and CEO Geoff Martha said: “This separation will allow Medtronic to focus our company and our capital on opportunities better aligned with our long-term strategies to accelerate innovation-driven growth and will position NewCo to unlock value.

“Independently, NewCo will be a leading connected care company with a compelling leadership position, attractive margins, and potential for growth acceleration with increased investment and dedicated capital allocation.

“Looking ahead, we remain focused on active portfolio management with an ongoing process of evaluating potential additions and subtractions to further accelerate Medtronic’s growth over the long term.”

The patient monitoring and respiratory interventions businesses are part of Medtronic’s respiratory, gastrointestinal, and renal divisions within its Medical Surgical Portfolio.

In the fiscal year 2022, the businesses generated around $2.2bn in revenues, with a global commercial footprint and a workforce of more than 8,000 employees.

According to Medtronic, NewCo will provide a complete suite of connected patient monitoring and respiratory care solutions, with advanced brands.

Its portfolio will include Nellcor pulse oximetry, Microstream capnography, BIS brain monitoring, INVOS perfusion monitoring, and HealthCast solutions for patient monitoring.

Also, it will include Puritan Bennett ventilators, Shiley airway portfolio, McGrath MAC video laryngoscopy, DAR breathing systems, as well as PAV+, NIV+ and IE Sync ventilation software solutions, for respiratory interventions.

Perella Weinberg Partners and Goldman Sachs & Co. will serve as financial advisors, and Wachtell, Lipton, Rosen & Katz; Skadden, Arps, Slate, Meagher & Flom; and Baker McKenzie as legal advisors to Medtronic on the transaction.