Tuesday, Shockwave Medical Inc. SMASH Stocks traded higher after a Wall Street Journal report suggesting Johnson and Johnson JNJ He is reportedly in talks to acquire the company.
Shockwave Medical is a cardiovascular medical device.
In 2022, Johnson & Johnson acquired a device focused on heart failure Abiomed Inc. for an initial payment of $380.00 per share in cash, corresponding to an enterprise value of approximately $16.6 billion.
Piper Sandler says it has considered Johnson & Johnson as a potential buyer because of its interest in expanding into cardiovascular devices and its strong financial position.
Additionally, in May 2023 there were reports indicating Johnson & Johnson's interest in acquiring Shockwave Medical. However, the Piper analyst writes that Shockwave Medical could thrive independently, maintaining the Overweight rating.
Piper's analysis suggests that acquiring Shockwave Medical would likely require a substantial offer due to its profile.
Compared to Johnson & Johnson's acquisition of Abiomed, which was about 12.5 times consensus 2024 revenue without milestones and closer to 13.7 times with milestones, it provides a benchmark.
Shockwave Medical reportedly sought bids around $300 per share, Piper notes, citing a StreetInsider report.
While a Johnson & Johnson-Shockwave Medical combination seems appropriate, other major players such as Medtronic Plc. MDT and Boston Scientific Corporation BSXfocused on interventional cardiology and peripheral vascular, might also be interested.
Both Medtronic and Boston Scientific had previously shown interest in acquiring Shockwave Medical.
The lack of obvious FTC issues suggests that regulatory clearance would not be a major hurdle. A competitive bidding process could emerge, with Johnson & Johnson seen as a strong strategic option for Shockwave Medical.
Price action: SWAV shares closed up 2.07% at $322.61 on Wednesday.
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