Abiomed To Be Bought By Johnson & Johnson In $16.6 Bln Deal; Stock Surges In Pre-market

Drug major Johnson & Johnson (JNJ) Tuesday said it has entered into a definitive agreement to acquire Abiomed Inc. (ABMD), a provider of cardiovascular medical technology, for an upfront payment of $380.00 per share in cash.

In pre-market activity on Nasdaq, Abiomed shares were gaining around 51 percent to trade at $381.60.

The enterprise value of the acquisition is approximately $16.6 billion which includes cash acquired.

Abiomed shareholders will also receive a non-tradeable contingent value right or CVR entitling the holder to receive up to $35.00 per share in cash if certain commercial and clinical milestones are achieved.

Under the deal terms, a unit of Johnson & Johnson will commence a tender offer for all outstanding shares of Abiomed.

The transaction was unanimously approved by both companies' boards of directors, and the completion is expected prior to the end of the first quarter of 2023.

Johnson & Johnson expects to fund the transaction through a combination of cash on hand and short-term financing.

Following the completion of the deal, Abiomed will operate as a standalone business within Johnson & Johnson MedTech, becoming one of 12 JJMT priority platforms as defined by annual sales of at least $1 billion each.

The deal is expected to broaden Johnson & Johnson MedTech's position as a growing cardiovascular innovator.

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