Johnson & Johnson (NYSE:JNJ) announced today that it completed its $16.6 billion acquisition of Abiomed (Nasdaq:ABMD).
Abiomed now becomes part of Johnson & Johnson, operating as a standalone business within its MedTech segment.
“We are excited to officially welcome the talented Abiomed team to Johnson & Johnson. Their patient-first philosophy aligns with our credo and our purpose to change the future of health for humanity,” said Joaquin Duato, CEO of Johnson & Johnson. “This acquisition marks another important step on Johnson & Johnson’s path to accelerating growth in our MedTech business and delivering innovative medical technologies to more people around the world.”
Last month, Johnson & Johnson announced its intention to acquire Abiomed for approximately $16.6 billion. Under the agreement, Johnson & Johnson intends to acquire through tender offer all outstanding Abiomed shares.
Johnson & Johnson last week extended the expiration date for the transaction by eight days. The tender offer expired on Dec. 21 at 11:59 p.m. ET.
“The completion of this acquisition allows Johnson & Johnson MedTech to expand our portfolio in the high-growth cardiovascular markets, adding solutions for heart recovery to our global market-leading Biosense Webster electrophysiology business,” said Ashley McEvoy, EVP and worldwide chair of MedTech at Johnson & Johnson. “Fueled by Johnson & Johnson’s global scale and commercial and clinical strength, we are excited to explore the opportunities and possibilities ahead to reach even more patients with critical unmet need.”
Details of the acquisition
Johnson & Johnson’s tender offer comprises an upfront payment of $380 per share in cash. Abiomed shareholders also receive a non-tradeable contingent value right (CVR). This entitles the holder to receive up to $35 per share in cash upon the achievement of certain commercial and clinical milestones.
Approximately 25,759,195 shares of Abiomed common stock were validly tendered and not properly withdrawn in the tender offer. That represents approximately 57.1% of the then-outstanding shares. All conditions to the tender offer have been satisfied.
Johnson & Johnson expects that the transaction won’t have a material impact on its 2022 financial results. It anticipates that it will accelerate pro format MedTech and Johnson & Johnson enterprise revenue growth. Additionally, the company projects a slightly dilutive impact to its adjusted earnings per share in the first year. However, the deal should be accretive by approximately 5¢ in 2024, then increasingly accretive thereafter.
Shares of ABMD ceased trading on Nasdaq in connection with the merger.
How Abiomed fits in
Johnson & Johnson said the acquisition widens the MedTech business’ position as a cardiovascular innovator.
Abiomed develops the Impella heart pump portfolio for treating coronary artery disease and heart failure. The buy provides Johnson & Johnson with “significant expansion opportunities” in indication, geography and product. The FDA just yesterday approved a version of the Impella ECP pump for a clinical trial. Earlier this month, the agency provided a positive update to Impella RP system’s labeling to reflect final post-approval study results.
In November, Johnson & Johnson said the acquisition diversifies and expands its portfolio while also benefitting patients. The companies touted their combined footprint, capabilities and expertise in the commercial and clinical sides.
Abiomed CEO Michael Minogue established a succession plan for the completion of the transaction and intends to assist in the transition. The plan sees Andrew Greenfield, Abiomed’s COO and a 17-year veteran at the company, appointed as president of Abiomed. Johnson & Johnson plans for Michael Bodner, worldwide president of J&J’s Biosense Webster electrophysiology business, to lead the integration under McEvoy’s leadership.