Medtronic Inc. (NYSE:MDT) is a leading medical device company that offers a spectrum of high-tech treatments for cardiovascular diseases, diabetes and neurological disorders. The cardiovascular group is the company's largest unit. Medtronic recently resolved long standing patent infringement issues with rival device maker, Edwards Lifesciences Corp. (NYSE:EW).

Further, Medtronic is planning to acquire Ireland-based Covidien plc (UNKNOWN:COV.DL). If the deal clears regulatory hurdles, Medtronic will be poised to advance its strategy of therapy innovation, globalization and creating economic value for its patients. In sum, all of these developments are good news for long-term investors in the medical technology sector.

Medtronic settles heart valve patent dispute with Edwards
As has been reported, Medtronic and Edwards Lifesciences announced a resolution in May 2014 to patent disputes over transcatheter heart valves after a long and bitter legal imbroglio.

The agreement came shortly after the courts ruled in favor of Edwards – a ruling that could have impeded Medtronic's ability to offer U.S. patients its CoreValve replacements. In short, Medtronic will make an initial one-time payment to Edwards of $750 million, and then successive annual royalty payments of at least $40 million until April 2022.

John Liddicoat, president of the company's Structural Heart business said in a statement, "With this resolution, we are pleased that Medtronic will be able to continue to provide the CoreValve System, as well as other products, to patients who need them in the US and abroad."

The resolution was also timely for Edwards Lifesciences as it announced last month that the US Food and Drug Administration has approved Edwards' SAPIEN XT transcatheter aortic valve. The valve is designed for patients suffering from severe symptomatic aortic stenosis.

The big breakthrough here is the elimination of open heart surgeries for aortic valve replacements. That being said patients in Europe have been the beneficiaries of transcatheter valve replacements since 2010. Investors should also note Medtronic won FDA early approval for its CoreValve system in January 2014. So the settlement with Edwards Lifesciences clears the way for Medtronic to offer its patients this transcatheter replacement option.

Why Medtronic's acquisition of Covidien matters
Medtronic and Covidien plc announced in June an agreement which contemplates Medtronic's acquisition of Covidien in a cash-and-stock transaction valued at $93.22 per Covidien share, or a total of about $42.9 billion.

Ultimately the new entity will support three main strategies: therapy innovation, globalization, and economic value for patients. The synergies created by combining Covidien's research and development and manufacturing with Medtronic's clinical expertise will enable the new company "to provide a broader array of complementary therapies and solutions that can be packaged to drive more value and efficiency in health care systems."

There is another rationale for this alliance since this deal is also commonly known as an inversion which will result in a lower U.S. tax burden for Medtronic. It goes without saying that these transactions are controversial.

What isn't controversial is Medtronic's slow, steady growth. Net sales in the 2014 fiscal year were $17 billion, an increase of 3% percent from the prior fiscal year. This was driven primarily by 2% growth in Medtronic's Cardiac and Vascular Group, 2% growth in the Restorative Therapies Group, and an impressive 9% growth in the Diabetes Group compared to the 2013 fiscal year.

The bottom line
Medtronic has long been one of the largest medical technology companies with its array of therapies for treating cardiovascular diseases, diabetes, and neurological disorders. Covidien has also been a leading global health care technology and medical supplies provider. Despite critics' worries over the tax inversion angle, this marriage goes far deeper than that.

The new Medtronic's entity will have global reach and its newly approved CoreValve along with its line of pacemakers, defibrillators, and infusion therapies will reach patients across the global health care village.

In other words, the impressive sales figures for its array of devices noted in the annual report will be supported by this transaction. Moreover, the company is presently trading at a P/E ratio of 21 and a forward P/E of about 15. So it stands to reason that Medtronic is worth a look by investors in the medical device segment with a long-term view.