Johnson & Johnson is all set to acquire Abiomed, the company which brought cardiovascular medical technology to the market. J&J, one of the largest healthcare companies in the world, is buying the company in cash for $380 per share. The total value of the heart pump-making company thereby goes to $16.6 billion, in which J&J approved the deal. The formal announcements were made on this purchase on Tuesday.
This transaction will let J&J move deeper into the world of heart disease treatment and away from consumer health roots, enhancing the shift that began last year.
As the healthcare company focuses more on MedTech and Pharmaceuticals, according to CEO Joaquin Duato, buying Abiomed will make J&J move forward to execute its strategic priorities.
About Abiomed
Abiomed develops products providing oxygenation and circulatory support for the heart so it can get enough rest through improved blood flow and heart pumping.
Abiomed offers Impella heart pumps for high-risk patients, and the pumps inserted into their hearts through arteries help to maintain a normal blood flow while stents are placed.
The sales of Abiomed saw a rise of 22% in the recent fiscal year and exceeded $1 billion, thrice its annual sales in five years.
About the Deal
After the deal is settled, Abiomed will operate as a stand-alone wing within the medical device segment of Johnson & Johnson.
Both boards have agreed to the deal, which will likely be completed by early 2023.
As per the deal, even after J&J acquires Abiomed, the shareholders of the medical device-making firm will receive shares up to $35 if any clinical or commercial milestone is achieved.
Conclusion
Johnson & Johnson plans a spinoff of the consumer health business in the next year, and boosting the growth of medical devices will be a crucial part of the plan.
