Johnson & Johnson, the world’s largest healthcare products company, is buying Abiomed, which develops technology to treat cardio ailments, for $16.6 billion.
The transaction will see Johnson & Johnson expanding its MedTech (JJMT) division into heart technology. Abiomed is a leading, first-to-market provider of cardiovascular medical technology, one of the fastest-growing medtech segments. It has an extensive portfolio for the treatment of coronary artery disease and heart failure and life-saving technologies,
The deal is expected to close early next year. Johnson & Johnson announced last year that it would hive off its consumer health division along with its beauty products line and would focus on pharmaceuticals and medtech.
Under the agreement, Johnson & Johnson will acquire through a tender offer all outstanding shares of Abiomed, for an upfront payment of $380.00 per share in cash. Abiomed shareholders will also receive a non-tradeable contingent value right (CVR) entitling the holder to receive up to $35.00 per share in cash if certain commercial and clinical milestones are achieved, according to a statement.
“Abiomed’s skilled workforce and strong relationships with clinicians, along with its innovative cardiovascular portfolio and robust pipeline, complement our MedTech portfolio, global footprint and robust clinical expertise. Together, we have the incredible opportunity to bring lifesaving innovations to more patients around the world,” said Ashley McEvoy, Executive Vice President and Worldwide Chairman of MedTech at Johnson & Johnson.
Abiomed will bring its Impella heart pumps, which are inserted through arteries into the hearts of high-risk patients. They temporarily help the heart maintain blood flow while a surgeon places stents in the patient. The innovative pump will complement JJMT’s portfolio, which includes the leading Biosense Webster electrophysiology business Abiomed will run as a stand-alone business within J&J’s medical device segment once the deal is completed.
Johnson & Johnson expects to fund the transaction through a combination of cash on hand and short-term financing.
Abiomed sales jumped 22% to exceed $1 billion in its most recent fiscal year The deal comes a few weeks after J&J said it had crossed third-quarter expectations, thanks to growth from its largest segment, pharmaceuticals. Sales climbed 2% in the company’s medical device segment to $6.78 billion.
