Medtronic Swallows HeartWare

Like a giant medical devices Pacman, Medtronic plc is on the acquisition trail again, this time agreeing to acquire miniaturized circulatory support technologies company, HeartWare International, Inc. The boards of directors of both companies have unanimously approved the transaction which will see Medtronic make a tender offer for all outstanding shares of HeartWare common stock for $58.00 per share, in cash. This values the transaction at approximately $1.1 billion. The acquisition is expected to close during Medtronic’s second fiscal quarter ending Oct. 28, 2016, subject to the satisfaction of customary closing conditions.

Background

No stranger to acquisitions of its own, HeartWare has bought Valtech and World Heart in recent years, which together with its own ventricular assist portfolio has placed it as a leader in minimally invasive cardiac devices. At the top of the heap are its own circulatory support devices for the treatment of advanced heart failure.

Medtronic’s press announcement states that the acquisition will expand its portfolio of diagnostic tools, therapies and services for patients suffering from heart failure, in line with the strategy to surround the physician with innovative products while focusing on patients and disease states.

HeartWare’s flagship product, the HVAD® System, features the world’s smallest full-support ventricular assist device (VAD) and is designed to reduce surgical invasiveness, improve patient recovery times and enhance patient outcomes. In addition, HeartWare has multiple technologies in development designed to offer progressively less-invasive mechanical circulatory support options for patients with end-stage heart failure. 

Company comments

for Medtronic 

“The addition of HeartWare’s innovative portfolio adds to our expanding portfolio of diagnostics, therapeutics and services that address heart failure patients,” said Mike Coyle, executive vice president and president of the Cardiac and Vascular Group at Medtronic. “The team at HeartWare has established excellent relationships with its hospital customers and built a strong position and reputation in the marketplace. This transaction, once closed, will be a further, important step toward Medtronic offering a complete suite of solutions to address patient needs across the heart failure care continuum.”

Omar Ishrak, chairman and chief executive officer of Medtronic stated; “HeartWare’s HVAD System enhances the portfolio of our Cardiac & Vascular Group, a team with a proven track record of executing and a demonstrated ability to scale early stage concepts into large, sustainable end markets. In addition, from a financial perspective, we are pleased to reach an agreement that meets our acquisition criteria of adding minimal to no net EPS dilution in the near-term, while at the same time creating strong, long-term expected returns for our shareholders.”

for HeartWare

“Medtronic is the worldwide leader in cardiovascular device technologies. Its expansive expertise in the development of implantable systems and battery technologies, patient monitoring, manufacturing, global regulatory policy and commercialization should help accelerate the development and introduction of our innovative pipeline products, and will expand access to our therapies and offerings to the sizeable heart failure population,” said Doug Godshall, president and chief executive officer, HeartWare. “Combining the unique capabilities of the HeartWare team, which has been entirely focused on mechanical support technologies, with the broad strength of the Medtronic organization provides a unique opportunity to enhance growth in the mechanical circulatory support market. All of our stakeholders, including customers, employees, shareholders, and most importantly, patients, will benefit meaningfully from this complementary combination.”

Source: Medtronic, plc

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