US-based pharmaceutical company Johnson & Johnson (J&J) has agreed to acquire medical device technology company Abiomed, for a total consideration oof $16.6bn in cash.
Under the terms of the deal, Abiomed shareholders will receive an upfront cash payment of $380.00 per share, along with a non-tradeable contingent value right (CVR).
The CVR entitles the shareholder to receive up to $35.00 per share in cash, subject to achieving certain commercial and clinical milestones.
The transaction, which has been unanimously approved by boards of directors of both companies, is expected to be completed prior to the end of the first quarter of 2023.
Its closing is subject to tender of a majority of the outstanding Abiomed shares, receipt of necessary regulatory approvals, and certain other customary closing conditions.
Upon closing of the transaction, Abiomed will operate as a standalone business within Johnson & Johnson MedTech (JJMT) segment.
The pharma company intends to finance the transaction through a combination of available cash and short-term financing.
Johnson & Johnson chief executive officer Joaquin Duato said: “The 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.
“We have committed to enhancing our 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.”
Abiomed provides cardiovascular medical technology, with a portfolio for the treatment of coronary artery disease and heart failure, and a pipeline of life-saving technologies.
J&J said that Abiomed’s cardiovascular portfolio and pipeline, along with skilled workforce and strong relationships with clinicians, will complement its MedTech portfolio.
Also, the acquisition will widen JJMT’s position, and advance the standard of care in heart failure and recovery, said the US drugmaker.
JP Morgan Securities served as financial advisor, and Cravath, Swaine & Moore as legal advisor to Johnson & Johnson, on this transaction.
Also, Goldman Sachs & Co. served as financial advisor and Sullivan & Cromwell as legal advisor to Abiomed.
Abiomed chairman, president and chief executive officer Michael R Minogue said: “We are pleased to have reached an agreement that reflects the remarkable value Abiomed created with our revolutionary Impella® heart pump platform and promising pipeline.
“This transaction partners us with an organization that shares our patients-first mindset and creates immediate value for our patients, customers, employees and shareholders.
“It will enable us to leverage Johnson & Johnson’s global scale, commercial strength and clinical expertise to accelerate our mission of making heart recovery the global standard of care.”