Johnson & Johnson said on Tuesday it struck a deal to buy heart pump maker Abiomed for $16.6 billion in cash, as it looks to boost growth at its medical devices unit after next year’s planned spinoff of its consumer health business.
Abiomed shareholders will also get the right to receive up to $35 per share in cash if certain commercial and clinical milestones are achieved.
J&J is focused on its pharmaceuticals and medical devices operations with the consumer health spinoff expected by November 2023. Chief Executive Joaquin Duato has said he will prioritize building up the medical devices unit through acquisition.
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“One of my priorities for the new Johnson & Johnson is to drive medtech to become a best-in-class performer,” Duato, who became CEO of J&J in January, said on a conference call after the deal’s announcement.
“This acquisition is consistent with that strategy, expanding J&J medtech into high-growth markets and accelerating revenue growth while advancing the standard of care,” he said.
The deal, expected to close before the end of the first quarter of 2023, will add to adjusted earnings from 2024, the company said.
Abiomed, which generated revenue of $1.03 billion in its most recent fiscal year which ended in March 2022, develops medical technology that provides circulatory and oxygenation support. Analysts expect its revenue to climb to $1.5 billion annually by 2025, according to Refinitiv data.
