J&J to acquire Micrus for $480M

J&J to acquire Micrus for $480M

Johnson & Johnson and Micrus Endovascular (San Jose, California), a developer and manufacturer of minimally invasive devices to address hemorrhagic and ischemic stroke, reported a definitive agreement whereby Micrus Endovascular will be acquired in a cash for stock exchange. The value of the transaction as of the anticipated closing date is estimated to be nearly $480 million, based upon Micrus Endovascular's 20.5 million fully diluted shares outstanding.

Under the terms of the agreement, Micrus Endovascular stockholders will receive at closing $23.40 for each outstanding Micrus Endovascular share.

The boards of directors of J&J and Micrus Endovascular have approved the transaction, which is subject to clearance under the Hart-Scott-Rodino Antitrust Improvements Act, similar regulation in other countries, Micrus Endovascular stockholder approval and other customary closing conditions.

Micrus Endovascular will join Codman & Shurtleff (Raynham, Massachusetts), the neuro device business of the DePuy (Raynham, Massachusetts) family of companies within J&J. Codman and Micrus Endovascular offer complementary technologies for treating cerebral aneurysms responsible for hemorrhagic stroke. The Codman neurovascular portfolio includes bare platinum coils, vascular reconstruction devices (VRDs) and access devices. Micrus Endovascular, solely focused on the neurointerventional market, is a leader in enhanced bioactive coils and a pioneer in the development of new technologies to improve the treatment of ischemic stroke and aneurysms.

"The merger represents an important strategic move in the neuro device space for us and a significant step forward in the delivery of technologies for the prevention and treatment of stroke," said Michael Mahoney, company group chairman for DePuy. "Together, Codman and Micrus Endovascular will offer clinicians and their patients a full range of stroke treatments and the potential to impact the condition in ways that could not be realized by either company alone."

Upon closing, the transaction is expected to be breakeven to slightly dilutive to J&J's 2010 earnings per share. The transaction is expected to close in the second half of 2010.

The merger agreement comes as drug and medical device maker Covidien (Dublin, Ireland) moves closer to buying the endovascular device maker ev3 (Plymouth, Minnesota). Covidien said in June it would pay $2.6 billion for the company and recently completed its tender offer for the stock (Medical Device Daily, June 2, 2010) .

In premarket trading, Micrus shares rose 5.1 % to $23.33. Over the past year the stock has traded between $7.80 and $22.50. J&J shares edged lower by 42 cents to $60.12.