8-KOther Events

JOHNSON & JOHNSON 8-K Report, Corporate Update (Mar 7, 2005)

Filed March 7, 2005For Securities:JNJ

Summary

Johnson & Johnson (JNJ) announced on March 4, 2005, a definitive agreement to acquire CLOSURE Medical Corporation (NASDAQ: CLSR) for approximately $370 million in a cash-for-stock transaction. CLOSURE Medical, a leader in biomaterial-based medical devices, has a history of collaboration with JNJ's Ethicon, Inc. since 1996, particularly in the development of topical adhesives. The acquisition is expected to enhance JNJ's portfolio in medical devices and is anticipated to close in the second quarter of 2005, subject to regulatory and shareholder approvals.

Key Highlights

  • 1Johnson & Johnson to acquire CLOSURE Medical Corporation for approximately $370 million in cash.
  • 2CLOSURE Medical will operate as a stand-alone entity under Ethicon, Inc., a JNJ subsidiary.
  • 3The acquisition is expected to strengthen JNJ's position in the medical device market, especially in topical adhesives.
  • 4CLOSURE Medical shareholders to receive $27.00 per share.
  • 5The transaction is expected to close in the second quarter of 2005, pending customary closing conditions.
  • 6JNJ anticipates a one-time, after-tax charge of approximately $68 million (or $0.02 per share) related to in-process research and development (IPR&D) write-off.
  • 7The acquisition is not expected to impact JNJ's previously provided financial guidance (excluding IPR&D).

Frequently Asked Questions

The acquisition of CLOSURE Medical is expected to enhance Johnson & Johnson's medical device portfolio, particularly through CLOSURE Medical's expertise in biomaterial-based devices and topical adhesives. Their established working relationship with Ethicon, Inc. since 1996 suggests a strong strategic fit and potential for synergistic growth.

Johnson & Johnson will pay approximately $370 million for CLOSURE Medical. The company expects to incur a one-time, after-tax charge of about $68 million, or $0.02 per share, related to the write-off of in-process research and development. Importantly, this charge is excluded from JNJ's previously issued financial guidance.

The transaction is subject to regulatory approvals, including clearance under the Hart-Scott-Rodino Antitrust Improvements Act, and approval from CLOSURE Medical's stockholders. It is expected to close during the second quarter of 2005.

Upon closing, CLOSURE Medical is expected to operate as a stand-alone entity, reporting through Ethicon, Inc., a Johnson & Johnson company. This suggests a degree of operational independence while benefiting from JNJ's broader resources and market reach.