Biotech Values

[DewDiligence]

JNJ Acquires MEND for $23.40/sh in Cash

[That’s a bare 6% premium to MEND’s closing price on Friday. JNJ says the deal is expected to be “slightly dilutive” to GAAP EPS, which I interpret to mean an EPS hit of less than $0.05 per quarter once the deal closes.]

http://finance.yahoo.com/news/Johnson-amp-Johnson-Announces-prnews-2254436238.html?x=0&.v=1

›Johnson & Johnson Announces Definitive Agreement to Acquire Micrus Endovascular

Combination of Neurovascular Businesses to Advance the Treatment of Stroke
prnewswire

Monday July 12, 2010, 8:30 am

NEW BRUNSWICK, N.J. and SAN JOSE, Calif., July 12 /PRNewswire-FirstCall/ -- Johnson & Johnson (NYSE:JNJ) and Micrus Endovascular Corporation (Nasdaq: MEND), a global developer and manufacturer of minimally invasive devices to address hemorrhagic and ischemic stroke, today announced a definitive agreement whereby Micrus Endovascular will be acquired in a cash for stock exchange.

Under the terms of the agreement, Micrus Endovascular stockholders will receive at closing $23.40 for each outstanding Micrus Endovascular share. The value of the transaction as of the anticipated closing date is estimated to be approximately $480 million, based upon Micrus Endovascular's 20.5 million fully diluted shares outstanding.

The boards of directors of Johnson & Johnson and Micrus Endovascular have approved the transaction, which is subject to clearance under the Hart-Scott-Rodino Antitrust Improvements Act, similar regulation in other countries, Micrus Endovascular stockholder approval and other customary closing conditions.

Micrus Endovascular will join Codman & Shurtleff, Inc., the neuro device business of the DePuy Family of Companies within Johnson & Johnson. Codman and Micrus Endovascular offer innovative and complementary technologies for treating cerebral aneurysms responsible for hemorrhagic stroke. The Codman neurovascular portfolio includes bare platinum coils, vascular reconstruction devices (VRDs) and access devices. Micrus Endovascular, solely focused on the neurointerventional market, is a leader in enhanced bioactive coils and a pioneer in the development of new technologies to improve the treatment of ischemic stroke and aneurysms. The combined business of Codman and Micrus Endovascular will provide a strong suite of solutions for hemorrhagic stroke, with many promising products in development for ischemic stroke.

"The merger represents an important strategic move in the neuro device space for us and a significant step forward in the delivery of technologies for the prevention and treatment of stroke," said Michael Mahoney, Company Group Chairman for the DePuy Family of Companies. "Together, Codman and Micrus Endovascular will offer clinicians and their patients a full range of stroke treatments and the potential to impact the condition in ways that could not be realized by either company alone."

"Stroke is a significant cause of death and disability around the world. At Micrus Endovascular, we are dedicated to developing innovative approaches to treating stroke and improving the outcomes of people impacted by this condition," said John Kilcoyne, Chairman and CEO, Micrus Endovascular. "By joining forces with Codman & Shurtleff, we believe we could have an even greater impact on treating this condition that accounts for one out of 18 deaths in the U.S."

According to the National Stroke Association, stroke is the third most common cause of death and the leading cause of serious, long-term adult disability in the U.S. Each year, approximately 795,000 people in the U.S. experience a stroke. The majority of victims (87%) have an ischemic stroke, which occurs when arteries are blocked by blood clots or other deposits or narrowed due to atherosclerosis; others experience a hemorrhagic stroke, which occurs when a brain aneurysm bursts. The cost of stroke is estimated to be a staggering $73 billion annually in the U.S. alone.

Upon closing, the transaction is expected to be breakeven to slightly dilutive to Johnson & Johnson's 2010 earnings per share. The transaction is expected to close in the second half of 2010.

About Codman & Shurtleff, Inc.

Codman & Shurtleff is a global neuroscience and neurovascular company that develops and markets a wide range of products and solutions for the diagnosis and treatment of neurological disorders including chronic pain management, adult and pediatric hydrocephalus, neuro critical care, aneurysm and stroke prevention and management. Codman & Shurtleff is part of the DePuy Family of Companies within Johnson & Johnson. The DePuy Family of Companies has a rich heritage of pioneering a broad range of products and solutions across the continuum of orthopaedic and neurological care. These companies are unified under one vision – Never Stop Moving™ – to express their commitment to bring meaningful innovation, shared knowledge and quality care to patients throughout the world. Visit www.depuy.com for more information.

About Micrus Endovascular

Micrus Endovascular develops, manufactures and markets implantable and disposable medical devices for use in the treatment of cerebral vascular diseases. Micrus Endovascular products are used by interventional neuroradiologists, interventional neurologists and endovascularly trained neurosurgeons to treat both cerebral aneurysms responsible for hemorrhagic stroke and intracranial atherosclerosis, which may lead to ischemic stroke. Hemorrhagic and ischemic stroke are both significant causes of death and disability worldwide. The Micrus Endovascular product lines enable physicians to gain access to the brain in a minimally invasive manner through the vessels of the arterial system. Micrus Endovascular's proprietary, three-dimensional microcoils anatomically deploy within the aneurysm, forming a scaffold that conforms to a wide diversity of aneurysm shapes and sizes. Micrus Endovascular also sells stents, balloon catheters, access devices such as guide catheters, microcatheters, guidewires and accessory products used in conjunction with its microcoils. For more information, visit www.micruscorp.com.‹