HeartWare International (HTWR) to Be Acquired by Medtronic Plc in $1.1B Deal
Shares of HeartWare International, Inc. (HTWR) were trading up +27.43 or +91.49 percent in Monday’s premarket after news that the company would be taken over by Medtronic Plc (MDT) in a transaction valued at $1.1 billion. HeartWare International stock closed at $29.98, down -3.17 or -9.56 percent in Friday’s regular trading session.
Framingham, Massachusetts based HeartWare International, Inc. is a medical device manufacturer specializing in miniaturized implantable heart pumps or ventricular assist devices for the treatment of advanced heart failure.
Founded in 1949 in Minneapolis, Minnesota, Dublin, Ireland based Medtronic Plc is the world’s largest medical device and medical technology development company. The company holds over 53,000 related patents and employs 85,000 people in more than 160 countries. Medtronic Plc maintains its operational headquarters in Fridley, Minnesota and the company stock is a component of the S&P 500.
Early this morning, the two companies announced a definitive merger agreement that will have Medtronic Plc pay $58.00 per share for all outstanding HeartWare common stock in a transaction valued at $1.1 billion. The amount is almost double HeartWare stock’s closing price of $29.98 on Friday. The deal was approved by the boards of both companies and is expected to close by Medtronic’s second quarter which ends on October 28th, 2016.
In this morning’s joint press release, Doug Godshall, President and Chief Executive Officer or HeartWare noted that, “Combining the unique capabilities of the HeartWare team, which has been entirely focused on mechanical support technologies, with the broad strength of the Medtronic organization provides a unique opportunity to enhance growth in the mechanical circulatory support market. All of our stakeholders, including customers, employees, shareholders, and most importantly, patients, will benefit meaningfully from this complementary combination.”
The acquisition will expand Medtronic’s portfolio of therapies and services for patients suffering from heart failure, offering less invasive mechanical support options. Heart failure is a leading cause of hospitalization and death in the United States, affecting over five million people. Expenditures for heart failure in the U.S. are estimated to be over $39 billion per year.
Medtronic estimates that the worldwide markets for ventricular assist devices is currently about $800 million and expects growth of mid to high single digits for 2016-2017 and accelerate to high single, low double digits after 2017. Medtronic estimates that patients suffering from heart failure could reach eight million by 2030.
Medtronic expects minimal to no net earnings per share dilution for the first two years, with the company offsetting the expected dilutive impact. Medtronic does not intend to modify its guidance for its fiscal 2017 year as a result of the transaction which is expected to be accretive to earnings in the third year after closing.
Other News About HTWR
HeartWare Completes Enrollment In HVAD® System LATERAL Study
Company enrolled 145 patients in 30 hospitals for the study.
HeartWare reports 1Q loss
HeartWare reported a loss of -$1.00 per share in the first quarter.
Other Stocks in the News
Bristol-Myers Squibb's bladder cancer treatment granted breakthrough therapy designation
FDA granted the designation which allows for the expedited development and review of the medicine.
EU clears Marriott's purchase of Starwood Hotels
The merger will create the world’s largest hotel company.