Medtronic’s diabetes unit MiniMed eyes $7.9 billion valuation in US IPO

By Arasu Kannagi Basil

Feb 24 (Reuters) – Medtronic’s MiniMed Group said on Tuesday it was targeting up to $7.86 billion valuation in its U.S. initial public offering, marking a step forward in the medical device maker’s plan to separate its diabetes business.

The Northridge, California-based unit, a heavyweight in diabetes care and which makes products such as insulin pumps, glucose monitoring systems and sensors, is seeking to raise up to $784 million in its IPO by offering 28 million shares priced between $25 and $28 apiece.

“With over 40 years of insulin pump manufacturing, MiniMed enters the market as an established business rather than a startup. The separation allows the company to target investors seeking pure-play exposure to diabetes technology,” said IPOX Research Associate Lukas Muehlbauer.

Medtronic said last year it planned to separate the diabetes business, its smallest segment by revenue, through an IPO and later split-off, aiming to simplify its portfolio and sharpen focus on high-margin growth markets.

The medical device maker has also carved out its kidney care portfolio through the Mozarc Medical joint venture in 2023 and exited the ventilator business in 2024 to streamline operations.

Medtronic’s decision to separate MiniMed comes nearly 25 years after it bought the business in a nearly $3.3 billion deal. The unit has contended with regulatory concerns over quality management and cybersecurity issues related to its certain devices in the last few years. It has, however, returned to growth in recent quarters helped by its 780G insulin pump and sensor improvements.

“While the company has shown strong revenue growth, the trade-off of becoming a separate entity is the loss of Medtronic’s financial safety net. MiniMed has posted net losses for three consecutive years, meaning investors will demand a clear path to profitability,” Muehlbauer said.

Medtronic is expected to carry out a subsequent split-off of MiniMed six months after the IPO.

Goldman Sachs, BofA Securities, Citigroup and Morgan Stanley are the active bookrunners. MiniMed aims to list on the Nasdaq under the symbol “MMED”.

(Reporting by Arasu Kannagi Basil in Bengaluru; Editing by Shilpi Majumdar)