Johnson & Johnson (NYSE: JNJ) Set to Acquire Abiomed (NASDAQ: ABMD) for $16.6 Billion or $380 per Share Plus CVR

Abiomed, Inc. (NASDAQ: ABMD) is engaged as a medical technology company, which is focused on providing support and resources to improve circulatory and oxygenation. Shares of the medical device company are surging 50% through afternoon trading on Tuesday, November 1, 2022. Over the past three months, Abiomed has seen average daily volume of 283,100 shares. However, volume of 4.63 million shares or dollar volume of around $1.75 billion, has already exchanged hands through afternoon trading.

Shares of Abiomed are rallying after the company announced it has entered into a definitive agreement to be acquired by Johnson & Johnson (NYSE: JNJ) in an all cash deal valued at $16.6 billion or $380 per share in cash. Abiomed shareholders will also receive a non-tradeable contingent value right (CVR), which entitles the investor to receive an additional $35 per share in cash if certain milestones are met.

The CVR milestones are broken down into three parts: $17.50 per share for net sales of Abiomed products exceeding $3.7 billion during JNJ’s fiscal Q2 2027 into fiscal Q1 2028; $7.50 per share payable upon FDA premarket application approval for the use of Impella products in STEMI patients by January 1, 2028; and $10 per share upon publication of a Class I recommendation for use of Impella products in high-risk PCI or STEMI patients with or without cardiogenic shock within four years from clinical endpoint publication dates but no later than December 31, 2029.

The acquisition helps Johnson & Johnson to bolster its MedTech division, particularly across cardiovascular disease treatment. Abiomed’s robust portfolio of first-in-kind treatments for coronary artery disease and heart failure, will provide JNJ with a innovative pipeline of tested technologies. JNJ says the acquisition will help to accelerate pro forma growth in the MedTech division as well as overall enterprise revenue growth for the medical giant.

Upon closing of the transaction, Abiomed Chief Commercial Officer Andrew Greenfield, has been appointed to serve as President of the subsidiary. The transaction is estimated to close before the end of the first quarter of 2023 and is subject to regulatory and customary closing conditions.

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