What are the main conditions for the acquisition to be completed?

The acquisition is subject to customary closing conditions, including the tender of at least 50% of ABIOMED's outstanding shares in the tender offer, expiration or termination of waiting periods under antitrust laws (such as the Hart-Scott-Rodino Act), and the absence of any legal impediments preventing the transaction.

What is a Contingent Value Right (CVR) and how does it work?

A CVR is a right granted to ABIOMED shareholders that entitles them to receive additional cash payments upon the achievement of specific future milestones. For this acquisition, the CVRs are tied to potential payments based on aggregate worldwide net sales of ABIOMED's products reaching $3.7 billion during a specific period, FDA approval for the Impella product family in STEMI patients without cardiogenic shock, and publication of certain study results in clinical practice guidelines.

When is the tender offer expected to commence and what is the target closing date for the acquisition?

The tender offer was expected to commence no later than November 15, 2022. The merger agreement contains termination rights if the offer is not consummated on or before July 1, 2023, with a potential extension to September 1, 2023, if regulatory conditions are the sole remaining unmet conditions.

JNJ 8-K: Material Agreements & Regulation FD

Q: What is the total potential value of the acquisition of ABIOMED?

The acquisition price is $380.00 per ABIOMED share in cash, plus a contingent value right (CVR) that could provide up to an additional $35.00 per share. Therefore, the total potential value per share is up to $415.00.

Summary

Johnson & Johnson (JNJ) announced on October 31, 2022, that it has entered into a definitive agreement to acquire ABIOMED, Inc. (ABMD) through a tender offer followed by a merger. The transaction is valued at $380.00 per ABIOMED share in cash, plus a non-tradeable contingent value right (CVR) that could provide up to an additional $35.00 per share. This acquisition is a significant move to bolster JNJ's medtech portfolio, specifically in the cardiovascular space with ABIOMED's leading heart pumps. The deal is subject to customary closing conditions, including antitrust approvals and the tender of at least 50% of ABIOMED's outstanding shares. The contingent value right introduces an element of future upside potential for ABIOMED shareholders based on specific sales and regulatory milestones, primarily related to ABIOMED's Impella heart pump technology. Investors should monitor regulatory approvals and the tender offer progress, as well as the potential impact of the CVRs on the ultimate acquisition price.

Key Highlights

1Johnson & Johnson to acquire ABIOMED, Inc. for $380.00 per share in cash plus a contingent value right (CVR) of up to $35.00 per share.
2The acquisition aims to enhance Johnson & Johnson's Medical Devices segment, particularly in the cardiovascular care market with ABIOMED's Impella heart pumps.
3The transaction structure involves a tender offer by JNJ's subsidiary, Athos Merger Sub, Inc., followed by a merger.
4Key conditions for closing include antitrust clearance (e.g., Hart-Scott-Rodino) and tendering of at least 50% of ABIOMED's outstanding shares.
5The CVR offers ABIOMED shareholders potential additional cash payments upon achievement of specific milestones, including net sales targets and FDA approvals for the Impella product family.
6ABIOMED's Board of Directors unanimously approved the merger agreement and recommends that its stockholders tender their shares.
7Customary termination fees apply, with ABIOMED potentially paying $550 million under certain circumstances, such as entering into an agreement with a superior proposal.

JOHNSON & JOHNSON 8-K Report, Material Agreement (Nov 1, 2022)

Summary

Key Highlights

Frequently Asked Questions