J&J will make a tender offer for Abiomed’s publicly traded shares. Under the terms of the agreement, Abiomed’s share owners would receive $380 per share in cash, representing an enterprise value of roughly $16.6 billion.
Abiomed shareholders will also earn an additional $35 per share in cash if certain sales and development milestones are reached.
The transaction is expected to close in the first quarter of 2023, subject to regulatory approval.
Purchasing Abiomed would give J&J ownership of the highly regarded Impella heart pump. The device received approval from the U.S. Food and Drug Administration (FDA) for use in patients with severe coronary artery disease — the No. 1 cause of death worldwide.
“We are pleased to have reached an agreement that reflects the remarkable value Abiomed created with our revolutionary Impella heart pump platform and promising pipeline,” Abiomed’s CEO Michael Minogue said in a press release.
Under J&J’s umbrella, Abiomed would benefit from greater scale advantages, as well as clinical and commercial expertise, according to Minogue. That should help to accelerate Abiomed’s growth, particularly in international markets.
The deal is intended to bolster J&J’s medical technology business ahead of the upcoming spinoff of its consumer health operations in late 2023. Abiomed could add a powerful growth element to the healthcare giant’s portfolio. The device maker has delivered seven straight quarters of double-digit sales growth.
J&J expects the acquisition of Abiomed to be additive to its adjusted earnings per share beginning in 2024.
Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Abiomed. The Motley Fool recommends Johnson & Johnson. The Motley Fool has a disclosure policy.