Mass. to get life-science giant

With the sweep of a federal regulator's pen, Massachusetts stands to gain a new life-science giant in April: Covidien , a medical-supplies maker with thousands of products and more than 43,000 employees worldwide.

Currently the healthcare division of conglomerate Tyco International Ltd. , Covidien is slated to become an independent company when Tyco completes a planned break up this spring, giving the state another device powerhouse on the scale of local industry leader Boston Scientific Corp.

The spinoff will close a chapter in the saga of Tyco, whose stock collapsed in 2002 in a wave of scandals over inflated financial results and the lavish lifestyles of top executives.

It also marks a rare reversal of the recent trend in which out-of-town owners have snapped up leading local names such as Gillette and John Hancock.

"It's very good news for Massachusetts," said Richard C. Lord of the Associated Industries of Massachusetts , a business lobby. "We've been concerned in the last few years in the loss of some major companies that were formerly headquartered here."

The new company will keep Tyco Healthcare's headquarters in Mansfield, where 1,300 people work in research and administration. It also has 650 employees at a Chicopee factory, and another 50 at a small division in Waltham.

Although it has more than 10,000 products in 145 countries and a new name, Covidien can claim local roots more than a century deep. The kernel of the business was Kendall Co. , a gauze maker founded in Walpole and bought by Tyco during its 1990s acquisition binge. Its current chief executive, Richard Meelia, was raised in Melrose and attended Boston College Law School.

Today Tyco Healthcare produces medical supplies and surgical devices under various brand names, from Curity bandages to Mallinckrodt hospital imaging systems that can cost more than $250,000. It also makes store-brand diapers, the acetaminophen in Tylenol, and high-tech ventilators to help people with lung problems breathe.

"There are very few companies that on day one begin at $10 billion and 43,000 employees," said company spokesman Eric Kraus .

The breakup still awaits approval from the Securities and Exchange Commission and a vote of Tyco's board. The company filed detailed documents on its proposed spinoffs last week.

Although the healthcare division recorded more than $2 billion in profits last year, analysts say some uncertainty still hangs over the entire firm, which is fighting numerous shareholder lawsuits. The suits stem from the firm's mismanagement under L. Dennis Kozlowski , the high-flying chief executive who built the modern Tyco conglomerate though the 1990s.

With a Bermuda incorporation and shifting headquarters, Tyco was a throwback to the multi- industry conglomerates of the 1970s. Today, the parent company's grab bag of product lines includes burglar alarms, fire-safety equipment, pipes, valves, electronics, and police radio systems.

The company planned to split up in 2002, but was soon rocked by accounting scandals that gutted its value, dropping the share price from nearly $60 to below $10. Kozlowski was sentenced to jail in 2005 for building a personal fortune on the company's dime. His $6,000 shower curtains, his company-funded Florida mansion, and the $2 million birthday party he threw for his wife in Sardinia became icons of corporate excess and self-dealing.

But unlike Enron Corp., which dissolved in a fog of bogus revenue and corrupt accounting practices, Tyco's underlying business survived, and has built back to about half the value it reached during the boom years.

"Reputationally, I'd have to say at this point the company is getting a lot more respected," said Michael Jaffe , a stock analyst who follows Tyco for Standard & Poor's. "They're trying to do things properly now. Over the past few years it seems like what they've tried to do is get the house in order."

According to filings, Covidien will bear a share of any potential liabilities from lawsuits against Tyco. Jaffe said the extent of damages can't be predicted.

Meelia , who will be chief executive of Covidien when it goes public, is the only Kozlowski-era head of a Tyco division still in place. He says the healthcare division has been thoroughly examined and had "absolutely no issues" of the type that brought Kozlowski down. The scandals did have an effect on morale, however.

"I don't think that people were throwing on those Tyco hats and T-shirts for a while," he said.

In anticipation of breaking off, Meelia and his team are hiring 300 people to handle accounting, compliance, and the other financial requirements of a public company. They have recruited a board that includes Jack Connors , the powerful former advertising executive who is also chairman of Partners HealthCare's board of trustees.

Meelia said Covidien's name is designed to evoke togetherness ("co") and the Latin word for life, vita. It beat out more than 6,000 candidates, including Aquient, Evendra, and Vancian .

The company plans to roll out a series of marketing events to launch the new name and create a fresh public image for a company that has long kept a low profile.

"It's a big mystery to many people," said Meelia of his company, "which is kind of the exciting part about the separation."

Stephen Heuser can be reached at sheuser@globe.com.