Medtronic (
www.medtronic.com), the world’s biggest manufacturer of ventricular-assist devices, has agreed to buy HeartWare International Inc for around $1.1 billion. This will help it to compete with St Jude Medical Inc, which last year bought HeartWare’s only competitor — Thoratec Corp — for $3.4 billion. Meanwhile, St Jude is being acquired by Abbott Laboratories in a $25 billion transaction.
Vijay Kumar, an analyst at Evercore ISI in New York, said in a note to investors: “This acquisition makes sense for Medtronic over the medium term, as it adds another growth driver and rounds out the company’s cardiovascular offerings — the broadest in the industry.”
The deal is Medtronic’s biggest since its $46 billion purchase of Dublin-based Covidien in January 2015, which gave it an Irish legal address through an ‘inversion scheme’ that enabled it to reduce its US taxes.
Both boards have unanimously approved the all-cash transaction, which is expected to ‘close’ by the end of October. The global market for ‘heart pumps’ is about $800 million; it is expected to increase by 4% to 9% this year and
next.