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J&J to Buy Abiomed in $16.6 Billion Deal

Image courtesy of Alamy/Casimiro Johnson & Johnson logo
Acquiring the maker of the world’s smallest heart pump will broaden portfolio of products meeting one of healthcare’s largest unmet needs, said J&J.

Healthcare giant Johnson & Johnson (J&J) announced today that it has entered into a definitive agreement to acquire heart-pump maker Abiomed in a deal valued at approximately $16.6 billion. Abiomed is specialized in heart, lung, and kidney support technologies.

Under the terms of the agreement, J&J will acquire all outstanding shares of Abiomed for an upfront payment of $380 per share in cash. Abiomed shareholders will also receive a non-tradeable contingent value right (CVR) entitling the holder to receive up to $35 per share in cash if certain commercial and clinical milestones are achieved. The transaction was unanimously approved by both companies’ boards of directors, said the news release.

J&J said that the transaction will broaden its Johnson & Johnson MedTech (JJMT) position as a growing cardiovascular innovator, advancing the standard of care in one of healthcare’s largest unmet-need disease states — heart failure and recovery. Cardiovascular disease is the number one cause of death.

Founded in 1981, Abiomed developed the Impella heart pump, the smallest in the world, which has been used in the United States since 2008. The company generated revenue of $1.03 billion in its most recent fiscal year ending in March 2022, reported Reuters in covering the acquisition. The news organization cites analysts who expect the company’s revenue to reach $1.5 billion annually by 2025.

“The addition of Abiomed is an important step in the execution of our strategic priorities and our vision for the new Johnson & Johnson focused on pharmaceutical and medtech,” said Joaquin Duato, J&J CEO. “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.”

In November 2021, J&J announced that it will separate its consumer products business from its pharmaceutical and medical device operations. "One of my priorities for the new Johnson & Johnson is to drive medtech to become a best in class performer," Duato is reported by Reuters to have said on a conference call after the deal's announcement. "This acquisition is consistent with that strategy, expanding J&J medtech into high growth markets and accelerating revenue growth while advancing the standard of care.”

Abiomed will operate as a standalone business within JJMT following completion of the acquisition, said the news release. It will become one of 12 JJMT priority platforms, as defined by annual sales of at least $1 billion each. J&J said that it does not expect to make significant job cuts at Abiomed as a result of the deal.

TAGS: M&A Business
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