Friday, healthcare products company Johnson & Johnson (JNJ), announced the completion of its previously stated strategic acquisition of cosmetic-product and breast-implant maker Mentor Corp. for approximately $1.07 billion in a cash tender offer.
The transaction is expected to have a dilutive impact in the range of approximately $0.03 to $0.05 per share to Johnson & Johnson's 2009 earnings.
Subsequent to the acquisition, Mentor is expected to operate as a stand-alone business unit reporting through Ethicon, Inc., a Johnson & Johnson company and a leading provider of suture, mesh and other products for a wide range of surgical procedures.
Mentor is expected to provide Ethicon with an opportunity to strengthen its presence in aesthetic and reconstructive medicine and raise the standard for innovation and patient outcomes in worldwide markets.
Earlier in December, New Brunswick, New Jersey-based Johnson & Johnson said it had entered into a definitive agreement to acquire Mentor Corp. Under the terms of the agreement, Johnson & Johnson commenced a tender offer to purchase all outstanding shares of Mentor at $31.00 per share. The offer was conditioned on the tender of a majority of the outstanding shares of Mentor's common stock on a fully diluted basis. The closing was also conditioned on clearance under the Hart-Scott-Rodino Antitrust Improvements Act and other customary closing conditions.
The $1.12 billion estimated net value of the transaction, including net debt at the time of closing, is based on Mentor's 34.6 million fully diluted shares outstanding. The boards of Johnson & Johnson and Mentor had already approved the transaction.
The offering period expired, as scheduled, on Jan. 22, 2009, and was not extended.
At the end of offer expiry period, the depositary for the tender offer indicated that Mentor shareholders had tendered approximately 31,806,675 shares of Mentor common stock including approximately 565,142 shares subject to guaranteed delivery procedures, representing approximately 93.9% of its outstanding shares of common stock. Johnson & Johnson confirmed that according to the offer terms, all shares tendered in the prescribed format had been accepted for payment.
Johnson & Johnson had indicated that it intends to complete the acquisition of Mentor through a "short-form merger." The process involves completion of merger without a vote or meeting of Mentor's remaining shareholders. Each of the remaining shares of Mentor common stock will be converted into the right to receive $31.00 per share, less any required withholding taxes, in cash and without interest.
According to Gary Pruden, Company Group Chairman, Johnson & Johnson, with responsibility for the Ethicon Franchise said, "Mentor will become the cornerstone of a broader Johnson & Johnson strategy for aesthetic medicine -- serving both consumers and medical professionals. We will use our combined strengths and experience to build a market-leading aesthetic business that capitalizes on Johnson & Johnson's broad-based commercial capabilities, worldwide surgical care footprint, and clinical scientific capabilities."
Johnson & Johnson closed Friday's trading at $55.97, down $0.90 or 1.58%, on a volume of 21.14 million shares the NYSE. In after hours, the stock further lost $0.41 or 0.73%, trading at $55.56. In the last 52-week period, JNJ shares traded in the range of $52.06 - $72.76, with a three-month average volume of $17.95 million shares.
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