Medtronic plc and HeartWare International, Inc., a supplier of less-invasive, miniaturized circulatory support technologies for the treatment of advanced heart failure, announced Monday that the companies have entered into a definitive agreement under which Medtronic will acquire HeartWare in a transaction valued at approximately $1.1 billion.
Under the terms of the agreement, Medtronic will commence a tender offer for all outstanding shares of HeartWare common stock for $58 per share, in cash. The boards of directors of both Medtronic and HeartWare have unanimously approved the transaction.
The acquisition is expected to close during Medtronic’s second fiscal quarter ending Oct. 28, 2016, subject to the satisfaction of customary closing conditions.
HeartWare shares jumped more than 92 percent Monday, while Medtronic shares slipped about 1 percent amid a broader market sell-off.
Medtronic’s acquisition of HeartWare will expand Medtronic’s portfolio of diagnostic tools, therapies and services for patients suffering from heart failure.
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. Medtronic estimates that the global VAD market is approximately $800 million currently and worldwide is expected to grow in the mid-to-high single digits for CY16-17, and accelerate to high-single/low-double digits beyond CY17.
Heart failure, also known as congestive heart failure, is a condition or a collection of symptoms in which the heart isn’t pumping enough blood to meet the body’s needs. Heart failure usually develops slowly after an injury to the heart. Some injuries may include a heart attack, too much strain on the heart due to years of untreated high blood pressure, or a diseased heart valve, among others.
Heart failure remains a leading cause of hospitalization and death in the United States, and its prevalence continues to increase, affecting more than five million people in the U.S. alone. The cost of heart failure is high. Healthcare expenditures in the U.S. on heart failure are estimated to be approximately $39 billion per year, making it one of the largest expenses to the healthcare system. With the aging of the population, Medtronic estimates that the number of patients with heart failure could exceed eight million by 2030.
(Story contains some information from Associated Press; Home page image credit: Aidan Jones)