St. Jude Medical Inc. has agreed to buy Thoratec Corp. for $3.4
billion in cash in a move aimed at growing its heart-failure device
business.
The offer of $63.50 a share is a 10% premium to Thoratec's
closing price on Tuesday and a 35.4% premium to its closing price
on Friday, before the deal talks were reported.
St. Jude made heart failure a key focus after its remote patient
monitoring system CardioMEMS gained U.S. approval in 2014. St. Jude
has said it expects revenue from the device to exceed $70 million
this year.
Thoratec's heat failure devices, which include HeartMate
ventricular assist systems, would allow St. Jude representatives to
leverage their relationships with heart failure physicians and
cardiac surgeons.
The deal is expected to add to St. Jude's per-share earnings and
sales growth in 2016.
The agreement also includes a 30-day go-shop period, during
which Thoratec can solicit other offers.
The deal is expected to close in the fourth quarter.
Separately, both companies reported second-quarter results
Wednesday.
St. Jude said its sales fell 2.6% to $1.41 billion but would
have been up 6% excluding the impact of currency fluctuations.
The company reported a profit of $290 million, or $1.02 a share,
up from $270 million, or 93 cents a share, a year earlier.
Excluding special items, per-share earnings were $1.03, down from
$1.07 a share a year ago.
The company had forecast 99 cents to $1.01 a share in adjusted
earnings.
Thoratec posted preliminary revenue between $128 million and
$129 million for the quarter, helped by favorable trends in its
North American HeartMate franchise.
Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com
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