Johnson & Johnson will spend $16.6 billion to buy cardiovascular technology company Abiomed to bolster its medical devices division.
The healthcare giant said Tuesday it would pay $380 for each Abiomed share and also provide an additional $35 per share in cash if certain business and clinical milestones are met.
Abiomed is developing technology that treats coronary heart disease and heart failure. This includes Impella heart pumps, which are used for patients with severe coronary heart disease.
J&J says the deal, which is expected to close early next year, will help the company expand its medical device segment into a high-growth business.
J&J announced nearly a year ago that it was focusing more on medical devices and its biggest business, pharmaceuticals, by splitting off its consumer health division that sells wound dressings and beauty products.
Abiomed will operate as a stand-alone business within J&J’s medical device segment once the transaction closes.
J&J will pay for the acquisition with a combination of cash and short-term financing. The company expects the deal to be neutral or slightly dilutive to adjusted earnings in the first year after closing, and then begin to improve results in 2024.
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