Extends Clinical
and Commercial Leadership Into
Growing Circulatory Support Sector
DUBLIN and FRAMINGHAM, Mass. -
June 27, 2016 - Medtronic plc (NYSE: MDT),
the global leader in medical technology, and HeartWare
International, Inc. (NASDAQ: HTWR), a leading innovator of
less-invasive, miniaturized circulatory support technologies for
the treatment of advanced heart failure, today announced that the
companies have entered into a definitive merger agreement under
which Medtronic will acquire HeartWare in a transaction valued at
approximately $1.1 billion. Under the terms of the agreement,
Medtronic will commence a tender offer for all outstanding shares
of HeartWare common stock for $58.00 per share, in
cash. The boards of directors of both Medtronic and HeartWare have
unanimously approved the transaction. The acquisition is expected
to close during Medtronic's second fiscal quarter ending Oct. 28,
2016, subject to the satisfaction of customary closing
conditions.
Medtronic's acquisition of HeartWare will expand
Medtronic's portfolio of diagnostic tools, therapies and services
for patients suffering from heart failure, aligning with
Medtronic's Mission of alleviating pain, restoring health and
extending life, and is in line with the Company's strategy to
surround the physician with innovative products while focusing on
patients and disease states.
HeartWare's flagship product, the
HVAD® System,
features the world's smallest full-support ventricular assist
device (VAD) and is designed to reduce surgical invasiveness,
improve patient recovery times and enhance patient outcomes. In
addition, HeartWare has multiple technologies in development
designed to offer progressively less-invasive mechanical
circulatory support options for patients with end-stage heart
failure. Medtronic estimates that the global VAD market is
approximately $800 million currently and worldwide is expected to
grow in the mid-to-high single digits for CY16-17, and accelerate
to high-single/low-double digits beyond CY17.
"The addition of HeartWare's innovative portfolio
adds to our expanding portfolio of diagnostics, therapeutics and
services that address heart failure patients," said Mike Coyle,
executive vice president and president of the Cardiac and Vascular
Group at Medtronic. "The team at HeartWare has established
excellent relationships with its hospital customers and built a
strong position and reputation in the marketplace. This
transaction, once closed, will be a further, important step toward
Medtronic offering a complete suite of solutions to address patient
needs across the heart failure care continuum."
"Medtronic is the worldwide leader in
cardiovascular device technologies. Its expansive expertise in the
development of implantable systems and battery technologies,
patient monitoring, manufacturing, global regulatory policy and
commercialization should help accelerate the development and
introduction of our innovative pipeline products, and will expand
access to our therapies and offerings to the sizeable heart failure
population," said Doug Godshall, president and chief executive
officer, HeartWare. "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."
Heart failure, also known as congestive heart
failure, is a condition or a collection of symptoms in which the
heart isn't pumping enough blood to meet the body's needs. Heart
failure usually develops slowly after an injury to the heart. Some
injuries may include a heart attack, too much strain on the heart
due to years of untreated high blood pressure, or a diseased heart
valve, among others. Heart failure remains a leading cause of
hospitalization and death in the United States, and its prevalence
continues to increase, affecting more than five million people in
the U.S. alone. The cost of heart failure is high. Healthcare
expenditures in the U.S. on heart failure are estimated to be
approximately $39 billion per year, making it one of the largest
expenses to the healthcare system. With the aging of the
population, Medtronic estimates that the number of patients with
heart failure could exceed eight million by 2030.
"HeartWare's HVAD System enhances the portfolio of
our Cardiac & Vascular Group, a team with a proven track record
of executing and a demonstrated ability to scale early stage
concepts into large, sustainable end markets," said Omar Ishrak,
chairman and chief executive officer of Medtronic. "In addition,
from a financial perspective, we are pleased to reach an agreement
that meets our acquisition criteria of adding minimal to no net EPS
dilution in the near-term, while at the same time creating strong,
long-term expected returns for our shareholders."
This acquisition supports Medtronic's therapy
innovation strategic priority. In collaboration with leading
clinicians, researchers and scientists worldwide, Medtronic offers
the broadest range of innovative medical technology for the
interventional and surgical treatment of cardiovascular disease and
cardiac arrhythmias. The company strives to offer products and
services that deliver clinical and economic value to healthcare
consumers and providers around the world.
This transaction is expected to meet Medtronic's
long-term financial metrics for acquisitions. Medtronic does not
intend to modify its fiscal year 2017 revenue outlook or earnings
per share (EPS) guidance as a result of this transaction, although
it is expected to provide increased confidence in the company's
ability to deliver on its FY17 revenue growth outlook. In addition,
Medtronic expects minimal to no net EPS dilution from this
transaction for the first two years as the company intends to
offset the expected dilutive impact. The acquisition is expected to
be earnings accretive in year three. Medtronic intends to report
results from the acquired HeartWare business as part of its Cardiac
Rhythm & Heart Failure division within the Cardiac &
Vascular Group.
Medtronic's financial advisor for the transaction
is J.P. Morgan Securities LLC, with Ropes & Gray LLP acting as
legal advisor. HeartWare's financial advisor is Perella Weinberg
Partners LP, with Shearman & Sterling LLP acting as legal
advisor.
About HeartWare
International
HeartWare International Inc. (www.HeartWare.com) develops and
manufactures miniaturized implantable heart pumps, or ventricular
assist devices, to treat patients around the world suffering from
advanced heart failure. Dedicated to developing new, minimally
invasive technologies to revolutionize the treatment of patients
with end-stage heart failure, HeartWare has multiple
technologies in development to offer progressively less-invasive
mechanical circulatory support options. HeartWare's corporate
headquarters are located in Framingham, Massachusetts, and the
company has technology, operations, manufacturing and distribution
centers in Miami Lakes, Florida; Arden Hills, Minnesota;
and Hannover, Germany.
About Medtronic
Medtronic plc (www.medtronic.com), headquartered in Dublin,
Ireland, is among the world's largest medical technology, services
and solutions companies - alleviating pain, restoring health and
extending life for millions of people around the world. Medtronic
employs more than 85,000 people worldwide, serving physicians,
hospitals and patients in approximately 160 countries. The company
is focused on collaborating with stakeholders around the world to
take healthcare Further, Together.
Important additional information
will be filed with the U.S. Securities and Exchange
Commission
This announcement is not a recommendation, an offer to purchase or
a solicitation of an offer to sell shares of HeartWare stock.
Medtronic's subsidiary has not yet commenced the tender offer for
shares of HeartWare's stock described in this announcement. The
tender offer will be followed by a second-step merger. Upon
commencement of the tender offer, Medtronic will file with the U.S.
Securities and Exchange Commission (SEC) a tender offer statement
on Schedule TO and related exhibits, including an offer to
purchase, letter of transmittal, and other related documents.
Following commencement of the tender offer, HeartWare will file
with the SEC a solicitation/recommendation statement on Schedule
14D-9. These documents will contain important information about
Medtronic, HeartWare, the transaction and related matters.
Investors and security holders are urged to read each of these
documents carefully when they are available. Investors and security
holders will be able to obtain free copies of the tender offer
statement, the tender offer solicitation/recommendation statement
and other documents filed with the SEC by Medtronic, its subsidiary
and HeartWare through the web site maintained by the SEC at
www.sec.gov. In addition, investors and security holders will be
able to obtain these documents by contacting the investor relations
departments of Medtronic or HeartWare at their respective contact
information included above or at investor.relations@medtronic.com
or investors@HeartWare.com.
Any forward-looking statements,
including, but not limited to, statements regarding the proposed
transaction between Medtronic and HeartWare, the expected timetable
for completing the transaction, strategic and other potential
benefits of the transaction, including meeting Medtronic's
long-term financial metrics for acquisitions, HeartWare's products
and product candidates, and other statements about Medtronic or
HeartWare managements' future expectations, beliefs, goals, plans
or prospects, are subject to risks and uncertainties such as those
described in Medtronic's and HeartWare's periodic reports on file
with the Securities and Exchange Commission. Actual results may
differ materially from anticipated results. Medtronic and HeartWare caution investors not to place
considerable reliance on the forward-looking statements contained
in this press release. These forward-looking statements speak only
as of the date of this document, and Medtronic and HeartWare
undertake no obligation to update or revise any of these
statements.
-end-
Medtronic Contacts:
Chris Garland
Public Relations
+1-952-905-6805
Ryan Weispfenning
Investor Relations
+1-763-505-4626
HeartWare Contact:
Christopher Taylor
Investor Relations
+1-508-739-0864
This
announcement is distributed by NASDAQ OMX Corporate Solutions on
behalf of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: Medtronic plc via Globenewswire
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