Medtronic PLC said Monday that it agreed to acquire HeartWare International Inc. for $1.1 billion, adding more heart-treatment products to the medical-device maker.
Medtronic will pay $58 a share in cash for HeartWare, a 93% premium over HeartWare’s Friday closing price of $29.98. Before Monday, HeartWare’s stock had fallen 60% over the past year amid declining sales, problems with product studies and an acquisition—later terminated—that was seen as dilutive to Heartware.
The companies said Monday that the acquisition gives Medtronic more diagnostic tools and treatments for heart failure, a condition where the heart isn’t pumping enough blood to meet the body’s needs.
HeartWare makes surgical implants that mimic the heart’s blood-pumping function, known as ventricular assist devices. Medtronic estimated Monday that the global VAD market is about $800 million now and is expected to grow by a percentage in the mid-to-high single digits in the current year and accelerate to a percentage in the high-single, low-double digits in future years.
The companies said they expect the deal to close during Medtronic’s second fiscal quarter, ending in late October.
Medtronic said it didn’t expect to adjust its fiscal 2017 revenue outlook or earnings because of the acquisition, and that it expected the deal to add to earnings in its third year.
In January 2015, Medtronic closed a $50 billion acquisition of Dublin-based Covidien that combined two of the world’s largest medical-supply companies. That deal allowed Medtronic to move its corporate headquarters from Minneapolis to Dublin in a so-called inversion deal that reduced the company’s tax burden.
Medtronic, for its fiscal year ended April 29, reported earnings of $3.54 billion on revenue of $28.83 billion. Heartware, in its most recent fiscal year ended Dec. 31, had a loss of $72.8 million on revenue of $276.8 million.
Last year, Medtronic rival St. Jude Medical Inc. agreed to pay $3.4 billion to acquire Thoratec Corp., another maker of VADs.
By Brittney Laryea
Source: Wall Street Journal
The companies will explore opportunities to apply Flagship’s innovative bioplatforms – an ecosystem that currently comprises 41 companies – to scientific challenges in disease areas within cardiometabolic and rare diseases and initiate research programmes based on these.
BD is expanding its long-running partnership with the blood collection company Babson Diagnostics. The two companies have been working together since 2019 on a device that can gather small volumes of blood from the capillaries in the fingertip without requiring any specialized training, and beginning with a focus on supporting primary care in retail settings.
Wednesday, Australian biotech CSL said (PDF) the regulatory review of its $11.7 billion acquisition of Switzerland’s Vifor Pharma will take “a few more months,” suggesting it won’t be able to close the transaction by June 2022 as previously expected.