Johnson & Johnson Throws Down $16.6 billion for Abiomed

Johnson & Johnson announced a definitive agreement for the acquisition of Abiomed, a medical device company focused on heart, lung, and kidney support technologies. The deal entails Johnson & Johnson’s purchase of all outstanding shares of Abiomed for $380 per share in cash. In total, the estimated value of the purchase sits around $16.6 billion. 

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One of the Largest Acquisitions of 2022

Founded in 1981, Abiomed is a Massachusetts-based medical technology company known for providing circulatory and oxygenation support technology. One of their most notable products is the Impella® heart pump. This platform enables the rest and recovery of a patient’s heart through improving blood flow or temporarily helping the heart with a pumping function.

Due to their strong portfolio, Abiomed saw a total revenue of $1.032 billion in 2022, a 21.74% increase from 2021. 

Both Abiomed’s strong portfolio and high revenue drew the attention of Johnson & Johnson. The deal the two companies reached outlines the purchasing of Abiomed for a total of $16.6 billion, with each share priced at $380. The day prior to the deal’s announcement, Abiomed shares had a price of $252. 

The acquisition is notable as it is one of the more pricey purchases in the industry of 2022. An acquisition priced similarly is Pfizer’s May purchase of Biohaven For $11.6 Billion.

On the acquisition, Joaquin Duato, Chief Executive Officer of Johnson & Johnson, said, “The addition of Abiomed is an important step in the execution of our strategic priorities and our vision for the new Johnson & Johnson focused on Pharmaceutical and MedTech. We have committed to enhancing our position in MedTech by entering high-growth segments. The addition of 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 purchase of Abiomed assists in Johnson & Johnson’s strategy of growing its position as an innovator in the field of cardiovascular support. In addition, the transaction serves to benefit patients by advancing the global standard of care for cardiovascular treatments. 

Johnson & Johnson expects the deal’s closing within the first quarter of 2023, though it is subject to applicable regulatory approvals and other customary closing conditions.

Author

Max Heirich