Johnson & Johnson (NYSE:JNJ) announced today that it extended the expiration date of its offer to acquire Abiomed (Nasdaq:ABMD).
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.
The deal includes 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. Both companies boards of directors approved the transaction.
Upon announcing the transaction, Johnson & Johson said it intends to complete it before the end of the first quarter of 2023.
About the extension
Johnson & Johnson’s offer was previously scheduled to expire at 11:59 p.m. ET on Dec. 13, 2022, according to a news release. The extension pushes it to 11:59 p.m. ET on Dec. 21, 2022. Athos Merger Sub, a wholly-owned subsidiary of Johnson & Johnson, extended the expiration date.
American Stock Transfer & Trust Company advised that approximately 19.3 million Abiomed shares have been validly tendered and not properly withdrawn pursuant to the offer. That represents approximately 42.75% of the outstanding shares of Abiomed’s common stock.
More on Johnson & Johnson’s Abiomed acquisition
Johnson & Johnson said the acquisition broadens its Johnson & Johnson 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.
In November, the company 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.
Following the transaction, Abiomed is to operate as a standalone business within Johnson & Johnson MedTech. Abiomed CEO Michael Minogue established a succession plan 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 EVP and Worldwide Chair of MedTech Ashley McEvoy’s leadership.
Further financial details
The milestones included in the acquisition include payments of $17.50 per share, payable if net sales for Abiomed products exceeds $3.7 billion during Johnson & Johnson’s fiscal second quarter of 2027 through the fiscal first quarter of 2028. Or, if this threshold is not met during this period but is subsequently met during any rolling four-quarter period up to the end of fiscal 2029, the agreement includes payments of $8.75 per share.
Upon FDA premarket application approval for the use of Impella products in STEMI patients without cardiogenic shock by Jan. 1, 2028, the agreement includes payments of $7.50 per share. A Class I recommendation for the use of Impella in high-risk PCI or STEMI with or without cardiogenic shock within four years from their respective clinical endpoint publication dates (no later than Dec. 31, 2029) leads to $10 per share payments.
Johnson & Johnson plans to fund the transaction through a combination of cash on hand and short-term financing. It expects to maintain a strong balance sheet throughout.