Johnson & Johnson Will Buy Medtech Maker Abiomed In A $16.6 Billion Deal

Source: Fast Company, Michael Grothaus
Photo: Getty Images

JNJ says it’s looking to strengthen its position as a solutions provider for the world’s top cause of death—cardiovascular disease.

Johnson & Johnson has announced that it is acquiring the Danvers, Massachusetts-based medical technology company Abiomed for $16.6 billion. Here’s what you need to know:

What is Abiomed? Abiomed is a medtech company based in Massachusetts that specializes in devices aimed at helping support a patient’s cardiovascular and circulatory health. Among its medtech devices, the company boasts the world’s smallest heart pump. Abiomed was founded in 1981.

What does Johnson & Johnson want with Abiomed? In a press release announcing the deal, Johnson & Johnson said the “transaction broadens Johnson & Johnson MedTech’s (JJMT) position as a growing cardiovascular innovator.” In other words, Johnson & Johnson is looking to strengthen its position as a solutions provider for the world’s top cause of death—cardiovascular disease.

Is this acquisition a done deal? Unless regulators have an issue with it, then yes, it appears the deal is locked. Johnson & Johnson says both of the companies’ boards of directors have unanimously approved the deal.

How does the $16.6 billion deal play out? Johnson & Johnson will pay Abiomed shareholders $380.00 per share in cash. ABMD shareholders also receive one contingent value right (CVR) that entitles them to another $35 per share if certain milestones are met. Those milestones are related to revenue milestones and potential FDA regulatory approvals.

How have ABMD investors reacted to the news? Quite well. Before the announcement, ABMD shares were trading at $252. After the announcement, the shares surged nearly 52% (at the time of this writing) to $382. JNJ shares were largely flat in pre-market trading on Tuesday.

When will the deal close? Johnson & Johnson says the acquisition is “expected to be completed prior to the end of the first quarter of 2023.”

ABOUT THE AUTHOR
Michael Grothaus is a novelist, journalist, and former screenwriter. His debut novel EPIPHANY JONES is out now from Orenda Books. You can read more about him at MichaelGrothaus.com.

https://www.fastcompany.com/90804526/jnj-johnson-johnson-abmd-heart-merger