Published April 27, 2011
Johnson & Johnson (JNJ) snatched up Swiss medical devices maker Synthes on Wednesday in a cash-and-stock deal worth $21.3 billion.
The transaction marks New Brunswick, NJ-based J&J’s largest acquisition ever and is aimed at bolstering its orthopedic business.
The deal is worth 159 Swiss francs per Synthes share, translating to an 8.5% premium on the stock’s closing price on Tuesday.
Synthes, which raked in $3.7 billion in sales a last year, is known for its cutting-edge devices in trauma, spine, cranio-maxillofacial and power tools and will be paired with J&J’s DePuy division.
“DePuy and Synthes together will create the most innovative and comprehensive orthopedics business in the world and enable us to better serve clinicians and patients worldwide," J&J CEO Bill Weldon said in a statement.
J&J said the acquisition is expected to modestly dilute its earnings in 2012. The deal, which is expected to close by mid 2012, has received the backing of the board of Synthes and Hansjoerg Wyss, the founder and chairman of the company.
J&J agreed to pay 55.65 Swiss francs in cash and 103.35 Swiss francs of common stock for Synthes.
“The combination presents a significant opportunity to jointly bring our products, services and educational offerings to the next level,” Synthes CEO Michel Orsinger said. “Together, we will be a more attractive and exciting company for our employees, and a more resourceful partner for our customers."
In the wake of its big acquisition, shares of J&J fell 1.79% to $63.79 ahead of Wednesday’s opening bell. The stock had been up 5% on the year as of Tuesday’s close.