Johnson & Johnson has agreed to buy cardiovascular technology group Abiomed for $16.6bn, including debt, a sign that mega dealmaking remains robust in the US despite geopolitical and economic uncertainty globally.
The US-based pharmaceutical group said on Tuesday it would pay $380 for each outstanding Abiomed share in a move the company hopes will help its broader effort to focus on drugs and medical devices.
Abiomed shareholders will also receive up to $35 a share in cash, depending on clinical milestones. Both companies’ boards of directors unanimously approved the deal.
Johnson & Johnson’s deal bucks a broader trend in merger and acquisition activity across the globe, which has slowed down dramatically since the start of the year as the war in Ukraine and tighter monetary policy by central banks to tame inflation has led chief executives to pause big transactions.
However, large pharmaceutical and healthcare companies — including those such as J&J that have benefited from the cash generated by Covid-19 vaccine sales — have been in a better position to strike deals at a time when valuations have come down in the biotech and medical devices sector.
New Jersey-based J&J said the Abiomed deal would broaden its medical technology division and hone its focus on cardiovascular disease. J&J announced plans last year to spin off its consumer products division, reorienting its efforts on drugs and medical devices, a trend seen in the industry at large.
Joaquin Duato, J&J’s chief executive, said the acquisition was an “important step” in delivering that transformation.
“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 and helps more patients around the world while driving value for our shareholders.”
Massachusetts-based Abiomed makes the Impella heart pump, which has US Food and Drug Administration approval for certain patients with severe coronary artery disease and other cardiovascular conditions.
J&J said the deal would bolster its near- and long-term sales growth, and that it would be accretive to adjusted earnings from 2024.
Rick Wise, analyst at Stifel, an investment bank, said the acquisition appeared to be a good fit for J&J, which could help drive sales of Abiomed’s products outside the US market.
“The transaction highlights CEO Joaquin Duato’s key initiative: expanding J&J’s MedTech presence, product portfolio and growth outlook. Reading through to the rest of MedTech, we’re inclined to see this deal as positive.”
Abiomed shares surged about 51 per cent shortly after Wall Street’s opening bell on Tuesday, while J&J was down 0.3 per cent.
Credit: Source link
