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Johnson & Johnson is pumping even more money into heart care with a roughly $13 billion deal with Shockwave Medical, which specializes in technology that helps open clogged arteries.
Johnson & Johnson is pumping even more money into heart care with a roughly $13 billion deal with Shockwave Medical, which specializes in technology that helps open clogged arteries.
The healthcare giant announced Friday that it would pay $335 in cash for each share of Shockwave. Total transaction value includes cash earned.
The transaction has already been approved by the boards of directors of both companies.
Shockwave, founded in 2009, focuses on endovascular lithotripsy technology that uses sonic pressure waves to crack calcium lesions within arteries and restore blood flow. This is similar to the technique used to crush kidney stones. A sound wave emitter is placed within the angioplasty catheter and reaches the calcified area of the artery.
Shockwave’s technology is used to treat coronary artery disease and peripheral artery disease.
The company’s revenue last year increased 49% to $730 million.
J&J Chief Financial Officer Joseph Wolk told analysts Friday that the market for the technology is still “in the early stages of expansion.” He said he sees room for further growth in the U.S. and abroad, and expects annual sales to reach at least $1 billion.
J&J will finance the acquisition with cash on hand and debt. Financing costs will dilute the company’s adjusted earnings by 10 cents per share this year and 17 cents in 2025, Wolk said.
The deal comes more than a year after J&J announced it would spend $16 billion to acquire another cardiovascular technology company, Abiomed. Both acquisitions are expected to strengthen J&J’s medtech or medical device division.
This is one of two remaining divisions, along with pharmaceuticals, that the company is focusing on after spinning off its consumer health division, which sells Band-Aids and beauty products, into a separate company.
J&J’s acquisition of Shockwave still requires regulatory and shareholder approval. The companies plan to complete the acquisition by the middle of this year.
Shares of New Brunswick, New Jersey-based J&J rose 32 cents to $152.82 after the market opened Friday. The Dow Jones Industrial Average, of which J&J is a constituent, also rose slightly.
Shockwave Medical, based in Santa Clara, Calif., rose more than $5 to $325.50.
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