Shares of Abiomed Inc.
ABMD,
rocketed 48.8% toward a 14-month high in premarket trading Tuesday, after the provider of medical technology that supports circulation and oxygenation agreed to acquired by Johnson & Johnson
JNJ,
in a deal valued at $16.6 billion. Under terms of the deal, J&J will pay upfront $380 in cash for each Abiomed share outstanding, which represents a 50.7% premium to Monday’s closing price of $252.08. Abiomed shareholders will also receive a “non-tradeable contingent value right” (CVR) which entitles the holder to receive up to $35 a share in cash if certain commercial and clinical milestones are achieved. Once the deal is completed, which is expected to occur before the end of the first quarter of 2023, Abiomed will operate as a standalone business as part of Johnson & Johnson MedTech. “We have committed to enhancing our position in MedTech by entering high-growth segments,” said J&J Chief Executive Joaquin Duato. “The addition of Abiomed provides a strategic platform to advance breakthrough treatments in cardiovascular disease and helps more patients around the world while driving value for our shareholders.” Abiomed’s stock has tumbled 29.8% year to date through Monday, while J&J shares have gained 1.7% and the Dow Jones Industrial Average
DJIA,
has lost 9.9%.
