J&U ends Shockwave rumor mill with $13.1 billion acquisition

Johnson & Johnson (Johnson & Johnson) got stuck shockwave medical (Southwest Airlines) The Dow Jones giant said the $13.1 billion deal will accelerate its transformation into high-growth markets.


Shockwave uses intravascular lithotripsy (IVL) to break up calcification in the arteries. This allows blood to flow more easily, reducing pain and the risk of heart attacks. Traditionally, patients undergo atherectomy, which uses a small drill to dig through the calcification. But this can cause embolic fragments to travel downstream and block the artery again.

Shockwave CEO Doug Godshall said in a 2022 interview that IVL “does not destroy the calcium to the point where it is released. The blood vessels expand dramatically.”

Shockwave shares have soared 68% so far this year as of Thursday’s close, with acquisition speculation among the driving forces.Last year there were rumors that Boston Scientific Corporation (BSX) can buy it.In early trading Today’s stock marketShockwave Medical shares rose 1.7% to $325.47, while J&J shares fell slightly to $152.34.

Shockwave Medical: Cardiovascular Technology Experts

The deal values ​​Shockwave stock at $355 per share and is expected to close in mid-2024.

Johnson & Johnson said the deal would slightly dilute its adjusted profits this year and next.

The addition of Shockwave Medical will further expand Johnson & Johnson Medical Technologies’ expertise in cardiovascular interventional medicine. Needham analyst Mike Matson pointed out that Johnson & Johnson previously acquired Abiomed and Laminar. Abiomed manufactures implantable circulatory support devices. Laminar makes devices that treat heart disease and reduce the risk of stroke.

“We view Johnson & Johnson’s bid as being of considerable value to Shockwave, do not anticipate any antitrust issues due to lack of product overlap, and believe a higher bid is unlikely,” he said in a note.

He downgraded Shockwave stock to a hold rating from buy.

Follow Allison Gatlin on X (formerly Twitter) at @IBD_AGatlin.

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