Johnson & Johnson boosts heart device business with $12.5 billion Shockwave Medical deal

Johnson & Johnson boosts heart device business with $12.5 billion Shockwave Medical deal

Johnson & Johnson on Friday agreed to buy Shockwave Medical for $12.5 billion in a deal that would help broaden its portfolio of medical devices used in treating heart diseases.

The acquisition gives J&J access to a device that uses shockwaves to break down calcified plaque in heart vessels, similar to how kidney stones are treated.

The conglomerate is focusing on building its cardiac health business and spent $16.6 billion to buy heart pump maker Abiomed in 2022 and $400 million to buy another heart-centric device maker Laminar.

The company’s spate of deals in recent years to bolster other parts of its business comes as its blockbuster Crohn’s disease drug, Stelara, faces possible rivals next year.

Shockwave’s catheter-based treatment known as intravascular lithotripsy (IVL) is used, often in combination with stents, to treat two heart conditions in which arteries get clogged with calcium deposits.

The deal, which values Shockwave at an enterprise value of about $13.1 billion, is expected to close by mid-2024, the companies said. Shockwave posted product sales of $730.2 million last year.

In early 2023, J&J had said it planned to focus on deals that would add value to its portfolio of cardiovascular products, and that many of its future transactions were likely to be small “tuck-in” acquisitions.

J&J expects to finance the Shockwave deal through a combination of cash on hand and debt.

J&J has offered $335 per share in cash, or a 17% premium to the stock’s closing price in late March, when the Wall Street Journal reported that the healthcare conglomerate was in talks to buy the company. Shockwave shares rose 1.6% to $325.18 in premarket trading.