Johnson & Johnson
(NYSE: JNJ)
announced today that it agreed to acquire Shockwave Medical (Nasdaq:SWAV) for approximately $13.1 billion.
Media reports previously linked Johnson & Johnson with interest in buying the intravascular lithotripsy (IVL) technology maker last year. Suggestions of interest in a deal resurfaced just weeks ago and now the companies have reached an agreement.
Under the terms, Johnson & Johnson plans to acquire all outstanding shares of Shockwave for $335 per share in cash. Both companies’ boards approved the deal, valued at around $13.1 billion.
Shockwave Medical’s IVL technology uses sonic pressure waves to treat people with calcified arterial plaque. A catheter-based treatment, it can help restore blood flow by cracking calcium lesions. Its uses include in both coronary artery disease (CAD) and peripheral artery disease (PAD), often in combination with stenting. Shockwave also offers a refractory angina treatment through its acquisition of Neovasc a year ago.
The company’s CEO earlier this year outlined a vision for growth centered around new product launches, R&D, global expansion and more.
Johnson & Johnson said the acquisition expands its MedTech business’ position in the cardiovascular intervention space. It also accelerates its shift into higher-growth markets, according to a news release. The company plans to expand its cardiovascular portfolio into two high-growth areas in CAD and PAD.
This acquisition follows a series of cardiovascular plays by the medtech giant. That includes the 2022 buy of Abiomed for $16.6 billion and the $400 million acquisition of Laminar last November.
“With our focus on Innovative Medicine and MedTech, Johnson & Johnson has a long history of tackling cardiovascular disease – the leading cause of death globally,” Johnson & Johnson Chair and CEO Joaquin Duato said. “The acquisition of Shockwave and its leading IVL technology provides a unique opportunity to accelerate our impact in cardiovascular intervention and drive greater value for patients, shareholders and health systems.”
More details on the Johnson & Johnson acquisition of Shockwave Medical
Tim Schmid, EVP and chair of J&J MedTech, said Shockwave brings a “truly differentiated opportunity.” He believes the deal can enhance the company’s leadership position in medtech.
“Shockwave’s IVL technology for treating CAD and PAD, and its strong pipeline, are in a class of their own,” he said. “We look forward to bringing Shockwave’s solutions into Johnson & Johnson MedTech and the hands of more physicians around the world.”
Doug Godshall, Shockwave’s president and CEO said that joining a “larger, more diveres organization” can further solidify IVL as a standard of care.”
“I am deeply grateful to our team members and colleagues whose efforts have made today’s milestone possible; their accomplishments and passion have been extraordinary,” he said. “I could not think of a better partner and home than Johnson & Johnson as the Shockwave team prepares to write its next exciting chapter.”
J&J plans to fund the transaction through a combination of cash on hand and debt. Upon the deal’s completion, Shockwave will operate as a business unit within Johnson & Johnson MedTech. Financials fall within the company’s cardiovascular portfolio (previously referred to as interventional solutions.”
In addition to his currnt role as global head of heart recovery for Abiomed, Michael Bodner assumes responsibility for the business. Shockwave President and CCO Isaac Zacharias becomes worldwide president of Shockwave, reporting to Bodner. Godshall expects to advise throughout the transition period.
The companies expect the deal to close by mid-2024, subject to Shockwave shareholder approval and other conditions.
Johnson & Johnson expects an accretive impact to operating margin. It projects diluted adjusted EPS by approximately 10¢ in 2024 and 17¢ in 2025 as a result.
(Find out more about intravascular lithotripsy at DeviceTalks Boston on May 1–2, 2024.)
