Large-cap medical technology company, Covidien ( COV - Analyst Report ) recently announced a five-year worldwide collaboration with GE Healthcare, a division of General Electrical ( GE - Analyst Report ) . The collaboration will allow GE Healthcare, a market leader in biomedical devices and services, to include the measurement technology used by Covidien in its patient monitoring systems.

GE Healthcare asserts that the collaboration will improve the standard of patient monitoring and safety. The alliance also manifests an undertaking by GE Healthcare to maintain an extensive patient monitoring system that is easily accessible to clinicians and healthcare administrators.

Following this collaboration, GE’s monitoring systems including CARESAPE Monitor B850 and CARESCAPE Monitor B650 will have easy access to the measurement technologies of Covidien, enhancing the clinical information available to physicians.

On the other hand, the collaboration will enhance the technology portfolio of Covidien associated with patient monitoring. The Nellcor pulse oximetry with Oximac Technology, INVOS Cerebral/ Somatic Oximetry and BIS Brain Monitoring will get the maximum advantage.

The oximetry and monitoring products are a part of Medical Devices segment, the primary growth driver of Covidien. These products edged up by 4% year over year in the second quarter, reflecting double-digit growth in sale of monitors (Nellcor, INVOS, BIS). The alliance will leverage the sales growth of monitors, leading to an increase in market share of the oximetry and monitoring sub segment, which was reportedly flat during the first quarter.

GE Healthcare has industry experience of about 100 years in the development and production of healthcare devices and services. The company will be able to assimilate clinical measurements and other patient health parameters at the point of care. It will thereby support accurate decision making after the alliance.

Also, Covidien management believes that the specialized measurement technology hitched with the patient monitors at GE Healthcare will ensure greater precision in patient care and safety.

Covidien is a leading developer, manufacturer and distributor of medical devices and services on a global scale. Its business segments overlap with the business of its competitors such as Becton, Dickinson and Company ( BDX - Analyst Report ) , Johnson and Johnson ( JNJ - Analyst Report ) and CR Bard Inc. ( BCR - Analyst Report ) among others.

With a growth rate higher than its competitors, the stock currently retains a Zacks #2 Rank, which translates into a short-term Buy. However, we maintain a long-term Neutral recommendation on the stock.