Johnson & Johnson agrees $16.6bn deal to acquire Abiomed

January 2023 | DEALFRONT | MERGERS & ACQUISITIONS

Financier Worldwide Magazine

January 2023 Issue

In a deal that will bring lifesaving innovations to more patients around the world, healthcare products company Johnson & Johnson is to acquire Abiomed, a world leader in breakthrough heart, lung and kidney support technologies, for $16.6bn.

Under the terms of the definitive agreement, Johnson & Johnson will acquire through a tender offer all outstanding shares of Abiomed, for an upfront payment of $380 per share in cash. Abiomed shareholders will receive a non-tradeable contingent value right entitling the holder to receive up to $35 per share in cash if certain commercial and clinical milestones are achieved.

The transaction – which has been unanimously approved by both companies’ boards of directors – broadens Johnson & Johnson MedTech’s position as a growing cardiovascular innovator, advancing the standard of care in one of healthcare’s largest unmet need disease states: heart failure and recovery.

Moreover, the acquisition advances capabilities in physician education, commercial excellence and robust clinical expertise – complemented by accelerated access and the adoption of lifesaving technologies for more patients around the world.

Operating in one of the fastest growing MedTech segments with significant expansion opportunities in indication, geography and product, Abiomed is a leading, first-to-market provider of cardiovascular medical technology with a first-in-kind portfolio for the treatment of coronary artery disease and heart failure. The company has an extensive innovation pipeline of life-saving technologies, and an 18-year track record of profitable growth.

“The addition of Abiomed is an important step in the execution of our strategic priorities and vision focused on pharmaceutical and MedTech,” said Joaquin Duato, chief executive of Johnson & Johnson. “We have committed to enhancing our position in MedTech by entering high-growth segments and 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 transaction is expected to be completed prior to the end of the first quarter of 2023 and is conditioned on the tender of a majority of the outstanding shares of Abiomed’s common stock, as well as the receipt of applicable regulatory approvals and other customary closing conditions.

“This transaction partners us with an organisation that shares our patients-first mindset and creates immediate value for our patients, customers, employees and shareholders,” said Michael R. Minogue, chairman, president and chief executive of Abiomed. “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.”

Serving as financial adviser to Johnson & Johnson is JP Morgan Securities LLC, with Cravath, Swaine & Moore LLP serving as legal adviser. Goldman Sachs & Co. LLC is serving as financial adviser to Abiomed, with Sullivan & Cromwell LLP serving as legal adviser.

Ashley McEvoy, executive vice president and worldwide chairman of MedTech at Johnson & Johnson, concluded: “We are committed to investing for growth and look forward to welcoming Abiomed’s talented team and working together to foster our shared patient-first mindset and winning culture of innovation.”

Fraser Tennant