Shockwave Medical, a company specializing in technology that helps open clogged arteries, has been acquired by Johnson & Johnson for $13 billion. The deal involves paying $335 in cash for each share of Shockwave, with the total deal value including cash acquired. The boards of directors from both companies have already approved the deal.
Founded in 2009, Shockwave focuses on intravascular lithotripsy technology that uses sonic pressure waves to crack calcium lesions in arteries and restore blood flow. The technology is similar to a technique used for breaking up kidney stones. Soundwave emitters are inserted inside angioplasty catheters to reach the calcified areas of the artery, and the technology is used to treat coronary artery and peripheral artery disease. Shockwave’s revenue increased by 49% last year to $730 million.
J&J Chief Financial Officer Joseph Wolk stated that the market for this technology is still in the early stages of scaling up, with potential for growth both in and outside the United States. The company expects annual sales to reach at least $1 billion. J&J plans to finance the deal using cash on hand and debt, with financing costs expected to dilute adjusted earnings by 10 cents per share this year and 17 cents in 2025.
This acquisition is the second major acquisition by J&J in the cardiovascular technology space, following a $16 billion deal to acquire Abiomed over a year ago. Both acquisitions are intended to strengthen J&J’s MedTech division, one of two remaining segments alongside pharmaceuticals after spinning off its consumer health division.
The acquisition of Shockwave by J&J is still subject to approvals from regulators and shareholders, with the companies expecting to close the deal by the middle of this year. Following the announcement, shares of J&J and Shockwave Medical saw slight increases in their stock prices
