J&J Acquires Abiomed for $16.6 Billion
Johnson & Johnson (“J&J”) announced on November 1, 2022, that it will acquire Abiomed for an upfront payment of $380.00 per share in cash, which equates to about $16.6 billion. The acquisition is expected to be completed in the first quarter of 2023. According to reports, after the acquisition, Abiomed “will operate as a standalone business within J&J within Johnson & Johnson MedTech, becoming one of the company’s dozen ‘priority platforms,’ defined by annual sales of at least $1 billion.”
Joaquin Duato, Chief Executive Officer of Johnson & Johnson, stated that “[t]he addition of Abiomed is an important step in the execution of our strategic priorities and our vision for the new Johnson & Johnson focused on Pharmaceutical and MedTech,” and he further stated the acquisition will continue to enhance J&J’s “position in MedTech by entering high-growth segments. The addition of Abiomed provides a strategic platform to advance breakthrough treatments in cardiovascular disease and helps more patients around the world while driving value for our shareholders.” The acquisition follows reports earlier this year that J&J intended to “get active on the medtech M&A front.”
Abiomed was founded in 1981 “for the purpose of developing the world’s first artificial heart. ” Abiomed currently makes the Impella heart pump, which is “a support system of percutaneous catheter-based technology offering hemodynamic support to the heart.” Abiomed also offers the Breathe OXY-1 System, which is a “cardiopulmonary support system with an integrated oxygen concentrator.” Last year, Abiomed acquired the start-up preCARDIA and its catheter technology. Recently, “Abiomed reported revenue of $266 million, up 7% and up 11% in constant currency year over year, the seventh consecutive quarter the company posted double-digit revenue growth in constant currency.”
The press release may be accessed here.
Baxter Completes $10B+ Acquisition of Hillrom
On December 13, Baxter International Inc. (“Baxter”) announced the completion of one of the biggest medtech acquisitions of 2021, acquiring Hillrom (a global medical equipment maker headquartered in Chicago) for a purchase price of ~$10.5 billion. The deal had originally been announced by Baxter in September 2021.
According to a statement on Baxter’s website, “Baxter’s acquisition of Hillrom has formed one of the world’s leading medical technology companies, centered around a shared vision to transform healthcare.”
Baxter’s product portfolio includes diagnostic, critical care, kidney care, nutrition, and surgical products used in hospitals, physician offices, and patient homes. According to Baxter, the addition of Hillrom’s product lines, including legacy Welch Allyn products that were acquired by Hillrom in 2015, will help Baxter improve care outcomes and broaden access to care. Hillrom’s products include the MacroView® Plus Otoscope, the Volara™ Oscillation & Lung Expansion Therapy System, the PST 500 Precision Surgical Table, and the Centrella® Smart+ Bed.
In a press release, Baxter’s chairman Jose E. Almeida stated:
The Baxter-Hillrom combination unlocks the next phase of our transformation, presenting a new wave of potential to drive greater impact for patients, clinicians, employees, shareholders and other communities we serve worldwide. Integrating our complementary capabilities introduces additional opportunities for growth across our broad geographic footprint and also creates remarkable new possibilities for connectivity with leading-edge digital health innovation focused on enhancing care, lowering costs and increasing workflow efficiency.
According to the press release, Baxter expects the combination to result in ~$250 million of annual pre-tax cost synergies within 3 years.
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