St. Jude strikes deal to buy heart failure treatment device maker for $3.4B


In a bid to expand its presence in the heart failure-prevention technology market, St. Jude struck a deal to buy device maker Thoratec Corp. for $3.4 billion.

The St. Paul-based medical technology company announced the deal Wednesday, saying it will "accelerate" St. Jude's growth by adding Thoratec's products to its already-established portfolio.

Looking at the big picture, St. Jude in the deal scoops up what Reuters deemed a "small rival," and expands the company's device footprint.

Based in California, Thoratec's key product, The Associated Press says, is a device that's implanted in a patient and helps the heart pump more blood. St. Jude already has implantable pacemakers and defibrillator devices.

Thoratec's company website says there are more than 20,000 of its devices implanted in patients suffering from heart failure.

According to the Wall Street Journal, St. Jude has honed in on the heart failure-device business since getting approval for its remote patient monitoring system CardioMEMS last year.

The Journal also says the acquisition of Thoratec's heart failure devices "would allow St. Jude representatives to leverage their relationships with heart failure physicians and cardiac surgeons."

President and CEO of St. Jude Daniel J. Starks said in the news release the deal "expands and enhances" St. Jude's presence in the heart failure-treatment market.

Bloomberg reported Tuesday the two companies had been in talks recently.

Deal details

The deal still has to be approved by shareholders and regulators, and must get through the closing process, the news release notes.

It's is an all-cash transaction, and in it, St. Jude will acquire all outstanding shares of Thoratec for $63.50 apiece – above its average closing price over the last month.

In addition, Thoratec has 30 days to shop itself around to other parties. If Thoratec takes a "superior" offer during that time, it has to pay St. Jude a $30 million termination fee, according to the release.

D. Keith Grossman, President and Chief Executive Officer of Thoratec, said in a statement St. Jude is now "uniquely positioned to advance treatment options for patients living with heart failure."

Bloomberg reported Tuesday shares of Thoratec had risen 74 percent since the start of the year thanks to the development of new products – all while there was buzz about the company being a possible acquisition target.

Additionally, St. Jude released its second quarter earnings report Wednesday, reporting net sales of $1.410 billion in the second quarter of 2015.

That'sa drop of 3 percent compared to the second quarter or last year, but "on a constant currency basis," sales are actually up 6 percent, the company says.

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