Are More Deals in J&J's Future?

The company's chairman and CEO hinted at the possibility of more M&A during a recent earnings call.

Omar Ford

April 16, 2024

2 Min Read
Image Credit: Maks_Lab via iStock/Getty Image

Johnson & Johnson has been making some huge acquisitions lately and the Brunswick, NJ-based company’s passion for deals doesn’t look like it’s going to stop.

Joaquin Duato, Johnson & Johnson’s chairman and CEO addressed the company’s position on future deal-making during a Tuesday morning earnings call.

“Our M&A strategy looks for the long term,” he said, according to a Seeking Alpha transcript of the earnings call.  “So, it's not going to change. Our capital allocation strategy will continue to be disciplined and M&A, it's going to be - remain a critical component of that. And it's important for me to underline that with the strength of our cash flow and our balance sheet, we have significant flexibility to consider multiple types of transactions, as you mentioned.

Duato’s comments come on the heels of the company announcing it would acquire Shockwave Medical for $13.1 billion. And in late 2022, the company made a move to acquire Abiomed for $16.6 billion. Both deals significantly bolster J&J’s cardiovascular offerings.

Duato noted J&J viewed deals in terms of “decades” and not “opportunistically.”

“We'll continue to evaluate opportunities agnostic to the sector and size and what we are looking for, it's a number of components," he said, according to a Seeking Alpha transcript of the call. "One, does this technology improve the current standard of care? That's critical for us. To what extent do we believe there is a patient impact, which is positive? Number two, does it -- is it consistent with the capabilities and knowledge that we have in-house? We see a correlation between that and the success of the acquisitions. Number three, does it enable us to enter into higher growth markets, so areas that are growing in which we can continue to develop that market? And finally, and very important for us, does it continue to deliver a compelling financial result for our shareholders.”

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

J&J MedTech posted $7.8 billion in revenue  - with year-over-year growth of 4.5%. The company was able to beat consensus on its earnings per share.

About the Author(s)

Omar Ford

Omar Ford is MD+DI's Editor-in-Chief. You can reach him at [email protected].


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