TIDMABT
RNS Number : 6906W
Abbott Laboratories
28 April 2016
Abbott to Acquire St. Jude Medical
COMBINATION WILL CREATE A PREMIER MEDICAL DEVICE LEADER AND
STRENGTHEN ABBOTT'S LONG-TERM GROWTH POTENTIAL
- Acquisition will enhance Abbott's global scale and
capabilities and will further diversify its portfolio of
best-in-class products and revenue sources
- Combined portfolio will include top positions in high-growth
markets and an industry-leading pipeline
- Transaction expected to be accretive to Abbott's adjusted
earnings per share(1) in the first full year after closing and
increasing thereafter
ABBOTT PARK, Ill. and ST. PAUL, Minn., April 28, 2016
/PRNewswire/ -- Abbott (NYSE: ABT) and St. Jude Medical, Inc.
announced today a definitive agreement for Abbott to acquire St.
Jude Medical, creating a premier medical device leader with top
positions in high-growth cardiovascular markets, including atrial
fibrillation, structural heart and heart failure as well as a
leading position in the high-growth neuromodulation market. Under
the agreement, St. Jude Medical shareholders will receive $46.75 in
cash and 0.8708 shares of Abbott common stock, representing total
consideration of approximately $85 per share. At an Abbott stock
price of $43.93(2) , this represents a total transaction equity
value of $25 billion. The combined company will have an
industry-leading pipeline expected to deliver a steady stream of
new medical device products across cardiovascular, diabetes, vision
and neuromodulation patient care.
St. Jude Medical's strong positions in heart failure devices,
atrial fibrillation and cardiac rhythm management complement
Abbott's leading positions in coronary intervention and
transcatheter mitral repair. Together, the company will compete in
nearly every area of the cardiovascular market and hold the No. 1
or 2 positions across large and high-growth cardiovascular device
markets. This best-in-class combined portfolio will have the depth,
breadth and innovation to help patients restore their health,
reduce costs for payors and deliver greater value to customers.
"Bringing together these two great companies will create a
premier medical device business and immediately advance Abbott's
strategic and competitive position," said Miles D. White, chairman
and chief executive officer, Abbott. "The combined business will
have a powerful pipeline ready to deliver next-generation medical
technologies and offer improved efficiencies for health care
systems around the world."
"Today's announcement is an exciting next chapter for St. Jude
Medical, bringing together two industry leaders with a shared
passion for innovation, culture and patients," said Michael T.
Rousseau, St. Jude Medical president and chief executive officer.
"Our combined scale will expand the global reach, competitiveness
and impact of our medical device innovation for physicians and
hospitals. This transaction provides our shareholders with
immediate value and the opportunity to participate in the
significant upside potential of the combined organization. I'd like
to thank our 18,000 employees whose hard work and commitment help
us deliver leading medical technologies to patients around the
world."
The acquisition of St. Jude Medical will advance Abbott's
strategic and competitive positions:
Aligned with healthcare and demographic trends: Cardiovascular
medical devices are important tools to address the growing health
and economic burden of cardiovascular disease (CVD). In the U.S.
alone, more than 40 percent of adults are expected to have one or
more forms of CVD by 2030. The combined business will have one of
the broadest portfolios of devices and an industry-leading pipeline
to help healthcare systems provide better care for patients while
increasing efficiencies and reducing costs.
Leadership positions in core businesses: With combined annual
sales of approximately $8.7 billion, Abbott's cardiovascular
business and St. Jude Medical will hold the No. 1 or 2 positions
across large and high-growth cardiovascular device markets and will
compete in nearly every area of the market - with an aggregate
market opportunity of $30 billion.
Well-managed diversity to deliver reliable, sustainable growth:
St. Jude Medical further diversifies and enhances sources of future
growth for Abbott - the combined pipelines are expected to bring
numerous new medical device products to key markets this year,
including:
-- St. Jude Medical's EnSite Precision(TM) next-generation
cardiac mapping system used to visualize and navigate catheters in
the heart during ablation procedures; first-to-market
MultiPoint(TM) Pacing technology advances quadripolar technology
and provides additional options for cardiac resynchronization
therapy patients who are not responsive to other pacing options;
Proclaim(TM) Elite recharge-free Spinal Cord Stimulation System and
Prodigy(TM) Chronic Pain System, which are used for treating
chronic pain and are MRI safe, upgradeable, and feature its
proprietary Burst technology.
-- Abbott's FreeStyle(R) Libre, a sensor-based glucose
monitoring system for people with diabetes that eliminates routine
finger sticks; Tecnis(R) Symfony, a first-in-kind continuous range
of vision intraocular lens for the treatment of people with
cataracts; and Absorb(TM), the world's first bioresorbable coronary
stent.
Strong positions in the world's largest and fastest-growing
geographies: St. Jude Medical has strong and leading positions
around the world, strengthening Abbott's global scale,
infrastructure and capabilities.
Financial Impact of Transaction
The acquisition of St. Jude Medical is expected to be accretive
to Abbott's adjusted earnings per share in the first full year
after closing and increasing thereafter, with approximately 21
cents of accretion in 2017 and 29 cents in 2018.(1) The combination
is anticipated to result in annual pre-tax synergies of $500
million by 2020, including both sales and operational benefits.
One-time deal-related costs and integration costs will be provided
at a future date.
St. Jude Medical's net debt of approximately $5.7 billion will
be assumed or refinanced by Abbott. Abbott intends to fund the cash
portion of this transaction with medium- and long-term debt.
The transaction, which has been approved by the boards of
directors of St. Jude Medical and Abbott, is subject to the
approval of St. Jude Medical shareholders and the satisfaction of
customary closing conditions, including specified regulatory
approvals. The transaction is expected to close in the fourth
quarter of 2016.
Separate Equity Issuance to Balance Capital Structure
Separately, Abbott expects to issue $3 billion of common stock
in the secondary market to rebalance its capital structure, with
timing to be determined.
Financing for the St. Jude Medical transaction and the
previously announced Alere Inc. acquisition contemplates financing
capacity to close both transactions.
These transactions are expected to be immediately accretive to
adjusted earnings per share(1) , as shown below:
Increase / (Decrease)
Adjusted Earnings Per Share*
2017 2018
----------------- -----------
Alere (per news release 2/1/16) $0.12-0.13 $0.20
St. Jude Medical $0.21 $0.29
Issuance of Abbott Common Stock ($0.07) ($0.10)
The separate issuance of equity to the market is not a condition
to the completion of either the St. Jude Medical transaction or the
Alere transaction. Abbott has obtained a commitment letter from
BofA Merrill Lynch for the full cash portion of the consideration
for both transactions.
Advisors
Evercore is serving as the lead financial advisor for Abbott
with Wachtell, Lipton, Rosen & Katz serving as legal counsel.
BofA Merrill Lynch will be providing financing and also is serving
as a financial advisor to Abbott. Guggenheim Securities is acting
as financial advisor and Gibson, Dunn & Crutcher LLP is serving
as legal counsel to St. Jude Medical.
Abbott Conference Call
Abbott will conduct a special conference call today at 7 a.m.
Central time (8 a.m. Eastern time) to provide an overview of the
transaction. A live webcast will be accessible through Abbott's
Investor Relations website at www.abbottinvestor.com.
St. Jude Medical Annual Shareholder Meeting
Due to St. Jude Medical's entry into the Merger Agreement, its
Annual Shareholder Meeting, which is currently scheduled for May 4,
2016, has been cancelled and will be rescheduled at a later
date.
About St. Jude Medical
St. Jude Medical is a leading global medical device manufacturer
and is dedicated to transforming the treatment of some of the
world's most expensive epidemic diseases. The company does this by
developing cost-effective medical technologies that save and
improve lives of patients around the world. Headquartered in St.
Paul, Minn., St. Jude Medical employs approximately 18,000 people
worldwide and has five major areas of focus that include heart
failure, atrial fibrillation, neuromodulation, traditional cardiac
rhythm management and cardiovascular.
For more information, please visit sjm.com or follow us on
Twitter @SJM_Media.
About Abbott's Vascular Business
Abbott's vascular business focuses on improving treatment
options for people with coronary artery disease, mitral
regurgitation and peripheral artery disease. It is the world's
leader in drug eluting stents and has products for coronary artery
disease, endovascular disease and structural heart disease.
Abbott's 2015 worldwide vascular sales were $2.8 billion, including
$2.2 billion in coronary products.
About Abbott
(MORE TO FOLLOW) Dow Jones Newswires
April 28, 2016 07:49 ET (11:49 GMT)
Abbott is a global healthcare company devoted to improving life
through the development of products and technologies that span the
breadth of healthcare. With a portfolio of leading, science-based
offerings in diagnostics, medical devices, nutritionals and branded
generic pharmaceuticals, Abbott serves people in more than 150
countries and employs approximately 74,000 people.
Visit Abbott at www.abbott.com and connect with us on Twitter at
@AbbottNews.
(1) Adjusted earnings per share excludes specified items such as
amortization of acquired intangibles, inventory step-up,
restructuring costs and other costs incurred to execute the
transaction. Adjusted EPS is a non-GAAP financial measure and
should not be considered a replacement for GAAP results
(2) Based on Abbott's 5-day volume weighted average share price
of $43.93 as of April 26, 2016
Important Additional Information
In connection with the proposed transaction, Abbott intends to
file a registration statement on Form S-4 with the SEC, which will
include a document that serves as a prospectus of Abbott and a
proxy statement of St. Jude Medical (the "proxy
statement/prospectus"), and each party will file other documents
regarding the proposed transaction with the SEC. Investors and
security holders of St. Jude Medical are urged to carefully read
the entire registration statement and proxy statement/prospectus
and other relevant documents filed with the SEC when they become
available, because they will contain important information. A
definitive proxy statement/prospectus will be sent to St. Jude
Medical's shareholders. Investors and security holders will be able
to obtain the registration statement and the proxy
statement/prospectus free of charge from the SEC's website or from
Abbott or St. Jude Medical as described in the paragraphs
below.
The documents filed by Abbott with the SEC may be obtained free
of charge at Abbott's website at www.abbott.com or at the SEC's
website at www.sec.gov. These documents may also be obtained free
of charge from Abbott by requesting them by mail at Abbott
Laboratories, 6100 Abbott Park Road, Abbott Park, IL 60064-6400,
Attention Investor Relations, or by telephone at (224)
667-8945.
The documents filed by St. Jude Medical with the SEC may be
obtained free of charge at St. Jude Medical's website at
www.sjm.com or at the SEC's website at www.sec.gov. These documents
may also be obtained free of charge from St. Jude Medical by
requesting them by mail at St. Jude Medical, One St. Jude Medical
Drive, St. Paul, MN 55117, Attention: Investor Relations, or by
telephone at (651) 756-4347.
Participants in the Solicitation
St. Jude Medical, Abbott and certain of their directors,
executive officers and employees may be deemed participants in the
solicitation of proxies from St. Jude Medical shareholders in
connection with the proposed transaction. Information regarding the
persons who may, under the rules of the SEC, be deemed participants
in the solicitation of the shareholders of St. Jude Medical in
connection with the proposed transaction, including a description
of their direct or indirect interests, by security holdings or
otherwise, will be set forth in the proxy statement/prospectus when
it is filed with the SEC. Information about the directors and
executive officers of Abbott and their ownership of Abbott common
shares is set forth in the definitive proxy statement for Abbott's
2016 annual meeting of shareholders, as previously filed with the
SEC on March 18, 2016. Information about the directors and
executive officers of St. Jude Medical and their ownership of St.
Jude Medical common shares is set forth in the definitive proxy
statement for St. Jude Medical's 2016 annual meeting of
shareholders, as previously filed with the SEC on March 22, 2016.
Free copies of these documents may be obtained as described in the
paragraphs above.
Private Securities Litigation Reform Act of 1995
Caution Concerning Forward-Looking Statements
Some statements in this news release may be forward-looking
statements for purposes of the Private Securities Litigation Reform
Act of 1995. Abbott and St. Jude Medical caution that these
forward-looking statements are subject to risks and uncertainties
that may cause actual results to differ materially from those
indicated in the forward-looking statements, including but not
limited to the ability of the parties to consummate the proposed
transaction on a timely basis or at all, the ability of the parties
to satisfy the conditions precedent to consummation of the proposed
transaction, including the ability to secure the required
regulatory approvals on the terms expected, at all or in a timely
manner, the ability of Abbott to successfully integrate St. Jude
Medical's operations, and the ability of Abbott to implement its
plans, forecasts and other expectations with respect to St. Jude
Medical's business after the completion of the transaction and
realize expected synergies. Economic, competitive, governmental,
technological and other factors that may affect Abbott's and St.
Jude Medical's operations are discussed in Item 1A, "Risk Factors,"
in each of Abbott's Annual Report on Securities and Exchange
Commission Form 10-K for the year ended Dec. 31, 2015, and St. Jude
Medical's Annual Report on Securities and Exchange Commission Form
10-K for the year ended Jan. 2, 2016, respectively, and are
incorporated by reference. Abbott and St. Jude Medical undertake no
obligation to release publicly any revisions to forward-looking
statements as a result of subsequent events or developments, except
as required by law.
CONTACT: Abbott Media: Scott Stoffel, +1 (224) 668-5201 or Darcy
Ross, +1 (224) 667-3655 or Abbott Financial: Scott Leinenweber, +1
(224) 668-0791, Michael Comilla, +1 (224) 668-1872 or St. Jude
Medical Media: Candace Steele Flippin, +1 (651) 756-3029 or St.
Jude Medical Financial: J.C. Weigelt, +1 (651) 756-4347 or Tony
Riter, +1 (651) 756-2114
Photo -
http://photos.prnewswire.com/prnh/20160427/361041-INFO
Logo - http://photos.prnewswire.com/prnh/20150928/271488LOGO
This information is provided by RNS
The company news service from the London Stock Exchange
END
ACQIPMBTMBJTBBF
(END) Dow Jones Newswires
April 28, 2016 07:49 ET (11:49 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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