said Tuesday it had agreed to buy heart-device maker
Abiomed Inc.
in an all-cash deal that would be valued at $16.6 billion upfront including cash.
Under the terms, J&J agreed to pay $380 a share upfront, and would pay an additional $35 a share if certain milestones are met. Abiomed shares closed at $252.08 Monday.
Abiomed sells the Impella heart pumps for treatment of conditions including a heart attack, heart failure and clogged arteries.
J&J, which sells prescription drugs and other health products, has been on the prowl for acquisitions this year under new CEO
Joaquin Duato,
who has said that beefing up the company’s medical-device unit through deals was a top priority.
The New Brunswick, N.J., company has been trying to increase sales growth of its medical-device unit, especially as it prepares to hive off its business selling Tylenol, Listerine and other consumer-health products.
“We have committed to enhancing our position in MedTech by entering high-growth segments. The addition of Abiomed provides a strategic platform to advance breakthrough treatments in cardiovascular disease,” Mr. Duato said.
Abiomed, based in Danvers, Mass., is in one of the fastest-growing areas of the medical-device industry. The company’s sales rose 22% last year to $1.03 billion.
J&J’s medical-device unit, which sells artificial knees, contact lenses and surgical products, had sales of $27.06 billion in 2021, up 18% from 2020. Sales had rebounded from the Covid-19 pandemic, and in previous years J&J’s device unit had moderate growth and sometimes sales declines.
J&J expects the acquisition will be neutral to or slightly reduce earnings in the first year, but then add 5 cents a share in 2024 and to add increasingly to earnings thereafter.
Abiomed bills Impella as the world’s smallest heart pump. For many patients, it is placed in the heart via a catheter inserted into a leg artery, to temporarily assist the heart’s pumping function while patients undergo other procedures to treat underlying cardiovascular disease.
It can also be implanted during surgery.
The deal “will enable us to leverage Johnson & Johnson’s global scale, commercial strength and clinical expertise to accelerate our mission of making heart recovery the global standard of care,” Abiomed Chief Executive
Michael Minogue
said.
Write to Peter Loftus at [email protected]
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