Johnson & Johnson to buy medical device maker Shockwave for $13.1B

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Johnson & Johnson on Friday announced it will buy medical device maker Shockwave Medical in a deal with an enterprise value of approximately $13.1 billion, including cash acquired. The transaction was approved by both companies’ boards of directors.

The deal helps the New Brunswick-based health care giant boost its portfolio of medical devices, specifically those that use shockwaves to break down calcified plaque in heart vessels, similar to how kidney stones are treated. It also extends Johnson & Johnson MedTech’s position in highest-growth, innovation-oriented segments of cardiovascular intervention.

Joaquin Duato, chairman and CEO of Johnson & Johnson, said: “With our focus on innovative medicine and medtech, Johnson & Johnson has a long history of tackling cardiovascular disease — the leading cause of death globally. 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.”

Tim Schmid, executive vice president and worldwide chairman of Johnson & Johnson MedTech, said: “Shockwave offers a truly differentiated opportunity to further enhance our leadership position in medtech, expand into additional high-growth segments, and ultimately transform the future of cardiovascular treatment. Shockwave’s IVL technology for treating CAD and PAD, and its strong pipeline, are in a class of their own. We look forward to bringing Shockwave’s solutions into Johnson & Johnson MedTech and the hands of more physicians around the world.”

Under the terms of the agreement, Johnson & Johnson will acquire all outstanding shares of Shockwave for $335 per share in cash through a merger of Shockwave with a wholly owned Johnson & Johnson subsidiary. Johnson & Johnson expects to fund the transaction through a combination of cash on hand and debt.

Johnson & Johnson expects to maintain a strong balance sheet and to continue to support its stated capital allocation priorities of research & development investment, competitive dividends, value-creating acquisitions and strategic share repurchases.

Following the completion of the transaction, Shockwave will operate as a business unit within Johnson & Johnson MedTech, and financials will be reported within Johnson & Johnson MedTech’s Cardiovascular portfolio, which was previously referred to as Interventional Solutions.