Johnson & Johnson, already a sterling presence in the upper echelon of the consumer health space, is set to dole out around $16.6 billion in cash for heart pump manufacturer Abiomed. The latter’s Impella pumps, used in the U.S. for nearly 15 years, are famous for being the smallest in the world. The company, founded in 1981, amassed $985 million in global revenue in FY2022.
Abiomed’s shares will be purchased by J&J at a 50.7% premium over its closing per share price of $252.08. In addition to the $380 per share, Abiomed’s shareholders will also retain the right to collect a $35 per-share cash fee that is contingent on the achievement of certain commercial and clinical milestones. Premarket trade saw J&J’s shares fall by 0.5%, while Abiomed’s surged by 50%.
Joaquin Duato, the new Chief Executive Officer of J&J as of January, said, “One of my priorities for the new Johnson & Johnson is to drive medtech to become a best-in-class performer. 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.” The medical device focus has long been teased by the company, which will set its sights on boosting that segment’s growth following its large-scale 2023 consumer health spinoff.