Johnson & Johnson (J&J) has made a significant move in the medical devices industry by agreeing to acquire Shockwave Medical in a deal valued at $13.1 billion. This acquisition is part of J&J’s strategy to strengthen its cardiac-health-centric business and drive growth in the market.
The deal, which includes debt, sees J&J offering $335 per share in cash, totaling $12.5 billion for the equity portion. This offer represents a 17% premium to Shockwave’s stock price in late March, showcasing J&J’s strong interest in the company.
Shockwave Medical specializes in a device that uses shockwaves to break down calcified plaque in heart vessels, a revolutionary treatment similar to how kidney stones are treated. With the total addressable market for such therapies estimated at around $10 billion, this acquisition opens up new opportunities for J&J in the cardiac health sector.
This move follows J&J’s recent acquisitions in the cardiac health division, including the purchase of heart pump maker Abiomed and heart-centric device maker Laminar. J&J CEO Joaquin Duato expressed confidence in the Shockwave acquisition, stating that it aligns with the company’s focus on enhancing its cardiovascular product portfolio.
As J&J prepares to face competition for its blockbuster drug Stelara, the company is looking to strengthen its medical devices business. Analysts view this acquisition as a strategic move by J&J to tap into a lucrative market and drive revenue growth.
With Shockwave’s catheter-based treatment generating significant product sales, J&J expects to finance the deal through a combination of cash and debt. Despite a projected decrease in adjusted earnings per share this year, J&J remains optimistic about the long-term benefits of this acquisition.