Johnson & Johnson Acquires Shockwave Medical for $13.1 Billion

Johnson & Johnson (J&J) has announced its acquisition of Shockwave Medical, Inc. for $13.1 billion, with an enterprise value of approximately $13.1 billion. The acquisition is expected to enhance J&J's position in the cardiovascular intervention market and accelerate sales growth for both J&J and its medtech segment. Shockwave Medical is a leading provider of innovative intravascular lithotripsy (IVL) technology for treating calcified coronary artery disease (CAD) and peripheral artery disease (PAD).

The acquisition is anticipated to solidify J&J medtech's leadership in cardiovascular intervention and complement its existing positions in heart recovery and electrophysiology, making it a category leader in four high-growth cardiovascular segments. Shockwave's IVL technology is the only one that can treat both intimal and medial calcification, and its acquisition is expected to accelerate revenue growth for J&J medtech.

Furthermore, the transaction is expected to be immediately accretive to operating margin for both J&J and J&J medtech, with Shockwave becoming J&J medtech's thirteenth priority platform, defined by annual sales of at least $1 billion.

The acquisition is set to be completed by mid-year 2024, subject to shareholder and regulatory approvals. Following the closure of the transaction, Shockwave will operate as a business unit within J&J medtech, and its financials will be reported within J&J medtech’s cardiovascular portfolio.

The transaction is expected to be operationally accretive upon closing, but it is projected to dilute adjusted earnings per share by approximately $0.10 in 2024 and approximately $0.17 in 2025, considering the impact of financing costs.

J&J's acquisition of Shockwave Medical is a strategic move to strengthen its presence in the cardiovascular intervention market and expand its reach into high-growth segments. With the addition of Shockwave's IVL technology, J&J aims to further enhance its leadership position in medtech and transform the future of cardiovascular treatment. As a result of these announcements, the company's shares have moved 2.0% on the market, and are now trading at a price of $326.26. For more information, read the company's full 8-K submission here.

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