Johnson & Johnson (J&J) is currently engaged in discussions to acquire Shockwave Medical, a prominent medical-device maker, according to sources familiar with the matter. The potential acquisition, if successfully completed, could materialize in the coming weeks, provided the negotiations progress smoothly. However, there remains a possibility that another interested party could emerge, potentially altering the trajectory of the deal.
Shockwave Medical, headquartered in Santa Clara, California, specializes in the development of medical devices designed to address cardiovascular diseases. With a market value of approximately $11 billion before the talks were disclosed by The Wall Street Journal, Shockwave’s stock surged by around 10% following the report, pushing its market capitalization closer to $12 billion.
If realized, the acquisition by Johnson & Johnson would represent a substantial transaction. J&J, boasting a market capitalization of roughly $375 billion, has been actively pursuing strategic acquisitions to bolster its medical-device division. In November 2022, J&J finalized its acquisition of heart-device maker Abiomed for $16.6 billion, marking one of its largest deals in recent years.
Shockwave Medical, led by Chief Executive Doug Godshall since 2017, went public in 2019. The company has projected robust revenue growth for 2024, with estimates ranging from $910 million to $930 million, reflecting a substantial increase compared to the previous year.
Notably, Abiomed, which J&J acquired in 2022, has pre-existing ties with Shockwave. In 2018, Abiomed made a $15 million investment in Shockwave, and the two companies collaborated on a training and education program in the United States and Germany.
Joaquin Duato, Chief Executive of Johnson & Johnson, has expressed the company’s intent to pursue aggressive acquisition strategies, particularly in bolstering its medical-device unit. The medical-device business has seen a resurgence in sales in recent times, driven by the rebound of hospital procedures from pandemic-induced lows.
The potential acquisition of Shockwave Medical underscores J&J’s commitment to expanding its presence in the healthcare sector. With quarterly results scheduled for April 16, J&J’s strategic moves in the medical-device space are poised to attract significant attention from investors and industry observers alike.
Overall, the uptick in dealmaking activity within the healthcare sector reflects a broader trend of increased transaction volumes in the United States, signaling renewed confidence and momentum in the market following a period of relative lull in 2023.