Covidien is selling its industrial chemical business to private equity firm New Mountain Capital LLC for around $280 million, the Loughlinstown, Ireland-based company announced Wednesday morning.

By divesting itself of Phillipsburg, N.J.-based Specialty Chemicals, which makes chemicals for quality-control laboratories and biotech manufacturing, Covidien is losing the last of the non-health care businesses it inherited from Tyco International when spun off from that company in June 2007.

Specialty Chemicals reported $414 million in sales last fiscal year, and about $216 million in sales for fiscal 2010.

The sale will dilute earnings per share by about 9 to 11 cents in fiscal 2010 and 2011, Covidien said.

"We view the move as a longer-term positive for COV given the division's limited fit with the remainder of COV's healthcare focused portfolio and much lower than corporate average gross and operating margins," health care investment bank Leerink Swann's analyst Rick Wise wrote in a letter to investors Wednesday.

Gross margins are in the mid-20 percent range, below the company's corporate average gross fro this financial year of 55 percent, Leerink said.

The sale is expected to close by September, Covidien said.

During recent trading Covidien's shares rose 1.46 percent, to $42.36.

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