J&J Puts the Rumors to Bed & Moves to Acquire Shockwave

Johnson & Johnson is acquiring Shockwave Medical for $13.1 billion after rumors of the potential deal surfaced late last month.

The deal extends J&J MedTech’s position in the cardiovascular intervention market and follows the company’s acquisitions of Abiomed, a specialist in heart recovery, and Laminar an innovator in left atrial appendage elimination for patients with non-valvular atrial fibrillation (AFib).

Plans call for J&J to acquire Shockwave for $335 per share and the companies are aiming for the deal to close by mid-2024.

Shockwave, which has long been among the 25 Most Attractive Medtech M&A Targets, has developed an intravascular lithotripsy (IVL) technology that uses shockwaves to crack calcium within the vessel wall, thus enabling arteries to expand under low pressure and become more compliant.    

Joaquin Duato, chairman and CEO of J&J said the company was ‘energized’ by the proposed acquisition during a call discussing the transaction details. Duato spoke about how Shockwave could potentially boost previous acquisitions.

“The proposed acquisition extends the breadth of our capabilities and the depth of our cardiovascular portfolio,” Duato said during the call.  “In fact, Shockwave’s IVL technology is complimentary to Abiomed’s heart recovery platform. The acquisition of Shockwave together with Abiomed and Laminar compliments J&J’s established global leadership position in electrophysiology through Biosense Webster, building a highly differentiated cardiovascular portfolio.”

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Following the completion of the transaction, Shockwave will operate as a business unit within Johnson & Johnson MedTech, and financials will be reported within Johnson & Johnson MedTech’s Cardiovascular portfolio, which was previously referred to as Interventional Solutions.

In addition to his current responsibilities for Abiomed as the Global Head of Heart Recovery, Michael Bodner will assume responsibility for the business upon close. Isaac Zacharias, who has six years with Shockwave, most recently serving as President and Chief Commercial Officer, will transition to become Worldwide President of Shockwave, reporting to Michael Bodner. Doug Godshall, Shockwave’s president and CEO, will advise through the transition.

“As part of a larger, more diverse organization, with broad expertise and a core focus on improving patient outcomes, we are confident we will be able to further solidify IVL as the global standard of care for patients,” Godshall, said in a release. “I am deeply grateful to our team members and colleagues whose efforts have made today’s milestone possible; their accomplishments and passion have been extraordinary. I could not think of a better partner and home than J&J as the Shockwave team prepares to write its next exciting chapter.” 

Related:Shockwave Closes on Deal that Brought Life to Sleepy M&A Scene

Is M&A on the Rebound in the Medical Device Industry?

The deal marks one of the largest medtech acquisitions in 2024. It also reinvigorates the medtech sector which had sluggish M&A activity in 2023.

The only other transaction that is close to the Shockwave deal is Boston Scientific’s proposed acquisition of Axonics – valued at $3.7 billion.

As for J&J, there could be more M&A on the horizon. During the call, questions came on whether or not the company would be involved in more M&A to boost its medtech offerings.

Company executives noted a strong cash flow, and a strong balance sheet gives it flexibility in considering M&A.

“We have the financial flexibility to do all types of transactions and we are agnostic to sectors,” Duato said. “When it comes to the type of transactions as we have done in the last couple of years, sometimes we go to established platforms like in this case and sometimes we go to earlier technologies like we did with Lamina.”