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9/16/16

National Coverage

(UPDATE - 2) J&J to Purchase Abbott’s Eye Surgery Unit for $4.33 Billion
Sep 16, 2016 | Bloomberg
By Tatiana Darie

Johnson & Johnson agreed to buy Abbott Laboratories’ eye-surgery equipment unit for $4.33 billion, moving the health-care giant toward its goal of boosting its three core businesses.
(UPDATE - 2) Abbott to sell its eye care business to J&J for about $4.33 billion
Sep 16, 2016 | Reuters

Abbott Laboratories (ABT.N) said it would sell its eye care business to Johnson & Johnson (JNJ.N) for about $4.33 billion in cash to focus on cardiovascular devices and diagnostics business.
Medical costs push U.S. consumer prices higher in August
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J&J buying Abbott's vision care assets for US$4.3b
Sep 17, 2016 | AFP

Johnson & Johnson announced Friday that it reached a deal to buy opthalmic assets from Abbott Laboratories for US$4.3 billion as it targets vision care in an aging world.
(UPDATE - 1) J&J Nears Deal to Buy Abbott’s Eye-Surgery Equipment Unit
Sep 16, 2016 | Wall Street Journal
By Jonathan D. Rockoff, Dana Mattioli, and Dana Cimilluca

Abbott Laboratories agreed to sell its eye-surgery equipment business to Johnson & Johnson for $4.325 billion as the health-care giants remake their lineups of medical devices, the companies said Friday.
J&J buys Abbott Medical for $4.3bn in eye surgery push
Sep 16, 2016 | Financial Times
By Mamta Badkar

US drugmaker Johnson & Johnson has said it will acquire a subsidiary of Abbott Laboratories for $4.3bn in cash in a push to grow its vision care business. New Jersey-based J&J said it was buying Abbott Medical Optics which brought in $1.1bn in sales last year. The acquisition would include the unit’s products in three business segments: cataract surgery, laser refractive surgery and consumer eye health.
J&J makes $4.3B acquisition to enter cataract surgery market
Sep 16, 2016 | USA Today
By Matt Krantz

Johnson & Johnson (JNJ) said Friday it is buying Abbott Medical Optics, an eye-care unit of Abbott Laboratories (ABT), for $4.3 billion in cash. The deal adds additional ophthalmic products to Johnson & Johnson's lineup including cataract surgery, laser refractive surgery and consumer eye health. J&J is one of the largest players in the global health care market with a variety of products including consumer products like contact lenses, pharmaceuticals and medical devices.
(UPDATE - 1) Johnson & Johnson to buy Abbott’s vision unit for $4.33B
Sep 16, 2016 | Associated Press

Johnson & Johnson said Friday that it is paying more than $4.3 billion in cash to buy the eye health unit of Abbott Laboratories as it seeks to boost its vision business.

Trade Coverage

J&J Purchases Abbott’s Eye Surgery Unit, Continues to Boost Core Businesses
Sep 16, 2016 | Mergers & Acquisitions
By Tatiana Darie

Johnson & Johnson (NYSE: JNJ) agreed to buy Abbott Laboratories’ (NYSE: ABT) eye-surgery equipment unit for $4.33 billion, moving the health-care giant toward its goal of boosting its three core businesses.
Johnson & Johnson Sees Growth in Ophthalmology, Acquires Abbott Medical Optics
Sep 16, 2016 | The Street
By Sarah Pringle

In the wake of two pending deals worth a combined $38.6 billion, Abbott Laboratories (ABT) has struck yet another multi-billion-dollar transaction that reaffirms growing interest in ophthalmology companies.
Johnson & Johnson to buy Abbott vision care unit for $4.3 billion
Sep 16, 2016 | Crain's Chicago Business Journal

Abbott Laboratories is selling its Abbott Medical Optics unit to Johnson & Johnson for $4.33 billion.
Johnson & Johnson is to acquire Abbott Medical Optics
Sep 17, 2016 | Ophthalmology Times
By Jolie Higazi

Johnson & Johnson (J&J) announced it has entered into a definitive agreement to acquire Abbott Medical Optics (AMO) for $4.325 billion in cash. AMO’s business segments include cataract surgery, laser refractive surgery, and consumer eye health, and reported sales in 2015 were $1.1 billion, according to the company.
Abbott Selling Optics Biz to J&J for $4 Billion
Sep 16, 2016 | QMed
By Chris Newmarker

Abbott Laboratories will sell its vision care business, Abbott Medical Optics, to Johnson & Johnson for more than $4 billion, the companies said Friday.
Abbott (ABT) to Sell Abbott Medical Optics to Johnson & Johnson (JNJ) in $4.33B Deal
Sep 16, 2016 | Street Insider

Abbott (NYSE: ABT) announced today that it will sell Abbott Medical Optics, its vision care business, to Johnson & Johnson (NYSE: JNJ) for $4.325 billion in cash.
J&J’s $4.32B Abbott Medical Optics deal bolsters eye surgery business
Sep 16, 2016 | MedCity News
By Stephanie Baum

Johnson & Johnson has plunked down more than $4.32 billion to acquire Abbott Medical Optics, an Abbott Laboratories subsidiary, a news release said.
Johnson & Johnson to buy Abbott Labs medical optics subsidiary for $4.3bln
Sep 16, 2016 | MarketWatch
By Emma Court

Johnson and Johnson JNJ, -0.22% said Friday afternoon it will buy Abbott Laboratories ABT, +1.70% subsidiary Abbott Medical Optics for $4.3 billion in cash. The deal, which is expected to close in the first quarter of 2017, will include ophthalmic products in the company's cataract surgery, laser refractive surgery and consumer eye health segments.
Johnson & Johnson (JNJ) Stock Lower, Buys Abbott Laboratories' Medical Optics Unit for $4.3 Billion
Sep 16, 2016 | The Street
By Annie Palmer

Shares of Johnson & Johnson (JNJ) were declining in late-afternoon trading on Friday as the New Brunswick, NJ-based medical devices, pharmaceutical and packaged goods manufacturer agreed to buy Abbott Laboratories (ABT) medical optics' unit for $4.3 billion in cash.
Abbott (ABT) Stock Higher as Johnson & Johnson to Buy Medical Optics Unit
Sep 16, 2016 | The Street
By Amanda Schiavo

Shares of Abbott Laboratories (ABT) are higher in late afternoon trading on Friday, as the healthcare company will sell its medical optics unit to Johnson & Johnson (JNJ) for $4.325 billion in cash.
J&J makes $4.3B acquisition to enter cataract surgery market
Sep 16, 2016 | NJ Biz
By Eric Strauss

New Brunswick-based health care giant Johnson & Johnson has agreed to pay $4.325 billion in cash for Abbott Laboratories' ophthalmic unit, it announced Friday.
Johnson and Johnson to acquire Abbott Medical Optics for $4.325 billion
Sep 16, 2016 | Healio

Johnson and Johnson announced that it has reached an agreement to acquire Abbott Medical Optics, a wholly owned subsidiary of Abbott Laboratories, for $4.325 billion in cash.
Shares now up at $41.80 (ABT) Abbott to Sell Abbott Medical Optics to…
Sep 16, 2016 | Finance Daily
By Ted Blackburn

Abbott to Sell Abbott Medical Optics to Johnson & Johnson for $4.325 Billion. In the market the company is trading up by 1.65% since yesterday’s close of $41.12.

Local Coverage

Abbott sells eye surgery products unit to Johnson & Johnson
Sep 16, 2016 | Daily Herald
By Anna Marie Kukec

A unit of Libertyville Township-based Abbott said Friday it has sold a unit that makes equipment for cataract and other eye surgeries to Johnson & Johnson for about $4.3 billion in cash.

Broadcast Coverage

Nightly Business Report
Sep 16, 2016 | CNBC

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Bloomberg Markets
Sep 16, 2016 | Bloomberg TV

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Closing Bell
Sep 16, 2016 | CNBC

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Full Text of Stories Below

National Coverage

(UPDATE - 2) J&J to Purchase Abbott’s Eye Surgery Unit for $4.33 Billion

Sep 16, 2016 | Bloomberg

By Tatiana Darie

Johnson & Johnson agreed to buy Abbott Laboratories’ eye-surgery equipment unit for $4.33 billion, moving the health-care giant toward its goal of boosting its three core businesses.
The deal is expected to close in the first quarter of 2017, the companies said on Friday in separate statements. The unit, called Abbott Medical Optics, makes equipment used in surgeries to repair cataracts and in Lasik procedures to improve vision, as well as eye drops and solutions. It generated $1.13 billion in sales for Abbott in 2015.
J&J, the world’s biggest maker of health-care products, has been chasing deals for all three of its main businesses to boost growth and offset potential competition for prescription medicines, the largest unit at the New Brunswick, New Jersey-based company. For Abbott, the divestiture is another step in chief executive officer Miles White’s effort to refocus the company since spinning off AbbVie Inc. in 2013 and agreeing this year to acquire Alere Inc., a medical testing company, and St. Jude Medical Inc., another device maker.
Abbott’s optics unit is “a self-contained business and had very little synergy with anything else in their device portfolio,” Debbie Wang, an analyst at Morningstar, said in a telephone interview. The company wants to take its medical device division “down the path of these more sophisticated products that St. Jude offers,” she said.
Abbott’s purchases
J&J’s medical devices and diagnostics business accounted for 36% of revenue in 2015, down from 41% in 2012. Consumer products, J&J’s third major unit, had 19% of the company’s sales last year.
Abbott, based in Abbott Park, Illinois, paid $2.8 billion for the medical optics unit in 2009. The sale will give Abbott a much-needed infusion of cash. It’s in the middle of purchasing St. Jude Medical Inc. for $25 billion and agreed to buy Alere Inc. for $5.8 billion, an acquisition that has hit numerous roadblocks since it was announced in February.
White has said he had financing in place to complete both deals, although it could involve issuing additional equity, a move investors frowned upon. The extra cash obtained from selling the fast-growing eye care business would ease the financial demands on the company.
Easier financing
“A lot of people in the market are going to look at this and say this will preclude them from having to do the equity raise, which investors would like,” said Jonathan Palmer, an analyst with Bloomberg Intelligence. “It makes the financial aspects of both deals easier to manage or swallow,” and it makes completion of the Alere acquisition more probable, he said.
Abbott is currently focused on building a leadership position in cardiovascular devices and expanding in diagnostics, White said in the company’s statement. St. Jude is the leading maker of devices to treat heart failure, while Alere is the No. 1 maker of medical tests that are conducted at the point of care.
The latest deal makes sense from a product perspective for both Johnson & Johnson and Abbott, Palmer said. While the ophthalmology business is strong in surgical equipment, it doesn’t have contact lenses, a difficult area to develop organically. J&J already sells contacts, and the acquisition will boost its surgical offerings, Palmer said.
Alere rose 2.7% to close at $44.07 in New York, well below Abbott’s $56-a-share offer, while Abbott’s shares increased 1.8% to $41.87. Johnson & Johnson fell less than 1% to $118.25.

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(UPDATE - 2) Abbott to sell its eye care business to J&J for about $4.33 billion

Sep 16, 2016 | Reuters

Abbott Laboratories (ABT.N) said it would sell its eye care business to Johnson & Johnson (JNJ.N) for about $4.33 billion in cash to focus on cardiovascular devices and diagnostics business.
The company expanded its medical device and diagnostics businesses this year with a $25 billion deal for St. Jude Medical Inc (STJ.N) and a $5.8 billion deal for Alere Inc (ALR.N).
Abbott Medical Optics, which the company acquired for nearly $1.4 billion in 2009, reported sales of $1.1 billion for 2015, J&J said on Friday.
The Wall Street Journal earlier reported that Abbott was in talks to sell the business to J&J.
"We've been actively and strategically shaping our portfolio, which has recently focused on developing leadership positions in cardiovascular devices and expanding diagnostics," Abbott Chief Executive Miles White said.
The Alere deal has run into rough weather with the target company filing a lawsuit in August, accusing Abbott of dragging its feet on key antitrust submissions to sabotage the deal.
To make matters worse, St. Jude is facing allegations that its pacemakers and defibrillators have cyber security flaws that hackers could exploit to harm patients. The company has sued short-selling firm Muddy Waters and cyber security firm MedSec Holdings Inc who raised the allegations.
Wells Fargo analysts said Abbott was likely selling the eye care business because it was less of a strategic fit once it acquired St Jude and the company would need to reduce debt after the two deals.
Abbott had long-term debt of about $6 billion as of June 30.
For Johnson & Johnson, the deal would help expand its eye care portfolio with products in cataract surgery, laser refractive surgery and consumer eye health units.
The World Health Organization estimates that about 20 million people are blind from age-related cataracts and that there are at least 100 million eyes with compromised visual acuity caused by cataracts, J&J said.
Friday's deal, which is expected to close in the first quarter of 2017, is expected to modestly add to J&J's earnings immediately.
J&J's vision care unit, which includes Acuvue brand contact lenses, generated revenue of $685 million in the second quarter.
Abbott shares closed up 1.8 percent at $41.87 on Friday. J&J shares closed down 0.3 percent at $118.25.

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Medical costs push U.S. consumer prices higher in August

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J&J buying Abbott's vision care assets for US$4.3b

Sep 17, 2016 | AFP

Johnson & Johnson announced Friday that it reached a deal to buy opthalmic assets from Abbott Laboratories for US$4.3 billion as it targets vision care in an aging world.
J&J will acquire Abbott Medical Optics, which works in three areas: cataract surgery, laser vision surgery (Lasik) and consumer items such as contact solution and eye drops. AMO had sales of US$1.1 billion in 2015.
"Eye health is one of the largest, fastest growing and most underserved segments in health care today," said Ashley McEvoy, who leads J&J's vision care division.
"With the acquisition of Abbott Medical Optics' strong and differentiated surgical ophthalmic portfolio ... we will become a more broad-based leader in vision care." Abbott chief executive Miles White said the divestiture fit with the company's shift.
"We've been actively and strategically shaping our portfolio, which has recently focused on developing leadership positions in cardiovascular devices and expanding diagnostics," Mr White said.
In afternoon trade, shares of Abbott rose 1.8 per cent to US$41.88, while Dow member J&J dipped 0.3 per cent to US$118.33.

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(UPDATE - 1) J&J Nears Deal to Buy Abbott’s Eye-Surgery Equipment Unit

Sep 16, 2016 | Wall Street Journal

By Jonathan D. Rockoff, Dana Mattioli, and Dana Cimilluca

Abbott Laboratories agreed to sell its eye-surgery equipment business to Johnson & Johnson for $4.325 billion as the health-care giants remake their lineups of medical devices, the companies said Friday.
The all-cash deal was previously reported by The Wall Street Journal.
"We've been actively and strategically shaping our portfolio," focusing more on heart devices and expanding diagnostics," Chief Executive Miles D. White said in prepared remarks.
The biggest of Abbott's recent deals is a roughly $25 billion pending agreement to buy St. Jude Medical Inc. and its portfolio of heart valves, pacemakers and other cardiovascular devices. Abbott also has agreed to buy a health- testing company, Alere Inc., for about $5 billion, though it has sought to scotch the deal as Alere faces a foreign- corruption investigation. Alere in August filed a lawsuit to force Abbott to complete the acquisition.
There has been a wave of mergers among medical-device companies, which are facing intensifying competition and pricing pressure from networks of hospitals that have themselves been consolidating.
Abbott's medical-optics business makes equipment used in cataract and LASIK vision-correction surgeries, as well as contact lenses. Last year, it notched $1.1 billion in sales, down 6.9%, largely because of a strong dollar. Sales have been picking up this year.
The deal, expected to close by April, isn't seen changing Abbott's earnings target for 2017.
J&J, based in New Brunswick, N.J., also has been acquiring medtech assets as part of efforts to accelerate growth in the unit. In 2012, it bought Synthes Inc., a maker of devices used to treat fractures and traumatic injuries, for roughly $20 billion.
The AMO business would add to J&J's lineup of surgical equipment. It also would complement J&J's portfolio of contact lenses and solutions, part of a $7 billion segment of the $68 billion global eye-health market. It would give J&J more products to pump through its distribution network -- and for salespeople to discuss with doctors, common motivations for health-care mergers.
"With this acquisition we will enter cataract surgery -- one of the most commonly performed surgeries and the No. 1 cause of preventable blindness," said Ashley McEvoy, the J&J executive responsible for the company's vision-care companies, in prepared remarks.
J&J sees the deal immediately adding to its adjusted earnings after the close.

Last year, J&J notched $25.1 billion in medical-device sales, while Abbott had $20.4 billion in total revenue.

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J&J buys Abbott Medical for $4.3bn in eye surgery push

Sep 16, 2016 | Financial Times

By Mamta Badkar

US drugmaker Johnson & Johnson has said it will acquire a subsidiary of Abbott Laboratories for $4.3bn in cash in a push to grow its vision care business.
New Jersey-based J&J said it was buying Abbott Medical Optics which brought in $1.1bn in sales last year. The acquisition would include the unit’s products in three business segments: cataract surgery, laser refractive surgery and consumer eye health.
Ashley McEvoy, group chairman for J&J’s vision care companies said:
With the acquisition of Abbott Medical Optics’ strong and differentiated surgical ophthalmic portfolio, coupled with our world-leading ACUVUE® contact lens business, we will become a more broad-based leader in vision care.
Importantly, with this acquisition we will enter cataract surgery – one of the most commonly performed surgeries and the number one cause of preventable blindness.
The deal, which is subject to regulatory approval, is expected to close in the first quarter of 2017.
J&J shares, which have advanced more than 15 per cent so far this year, were little changed on the news, trading about 0.2 per cent lower. Shares in Abbott Laboratories climbed as much as 1.6 per cent.

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J&J makes $4.3B acquisition to enter cataract surgery market

Sep 16, 2016 | USA Today

By Matt Krantz

Johnson & Johnson (JNJ) said Friday it is buying Abbott Medical Optics, an eye-care unit of Abbott Laboratories (ABT), for $4.3 billion in cash.

The deal adds additional ophthalmic products to Johnson & Johnson's lineup including cataract surgery, laser refractive surgery and consumer eye health. J&J is one of the largest players in the global health care market with a variety of products including consumer products like contact lenses, pharmaceuticals and medical devices.
"Eye health is one of the largest, fastest growing and most underserved segments in health care today," says Ashley McEvoy, company group chairman at Johnson & Johnson's vision care unit in a statement. "With the acquisition of Abbott Medical Optics' strong and differentiated surgical ophthalmic portfolio, coupled with our world-leading ... contact lens business, we will become a more broad-based leader in vision care. Importantly, with this acquisition we will enter cataract surgery – one of the most commonly performed surgeries and the number one cause of preventable blindness."
This is J&J's only deal this year the most recent acquisition since buying Novira Therapeutics in December for and undisclosed sum, says S&P Global Market Intelligence. It's the largest deal with a disclosed amount since its $21 billion buy ofSynthes in June, 2012 , which was announced in April, 2011.

Shares of J&J fell 16 cents, or 0.1%, to $118.47. Abbott rose 64 cents, or 1.6%, to $41.76.

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(UPDATE - 1) Johnson & Johnson to buy Abbott’s vision unit for $4.33B

Sep 16, 2016 | Associated Press

The unit, called Abbott Medical Optics, makes lasers and other equipment used for cataract surgeries and laser vision correction procedures. It also makes eye drops and cleaners for contact lenses. AMO posted sales of $1.1 billion last year.
Johnson & Johnson said that the purchase will enter it into the cataracts surgery market and grow its own vision business, which includes Acuvue contact lenses. The New Brunswick, New Jersey, company makes baby shampoo, blood testing equipment and other health care products.
Abbott, based in North Chicago, Illinois, said that it is selling the unit to focus on its treatments for the heart and arteries and its disease testing equipment.
The deal is subject to antitrust clearance and is expected to close in the first quarter of 2017.

Shares of Johnson & Johnson slipped 38 cents to $118.25 Friday. Abbott shares rose 75 cents to $41.87.

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Trade Coverage

J&J Purchases Abbott’s Eye Surgery Unit, Continues to Boost Core Businesses

Sep 16, 2016 | Mergers & Acquisitions

By Tatiana Darie

Johnson & Johnson (NYSE: JNJ) agreed to buy Abbott Laboratories’ (NYSE: ABT) eye-surgery equipment unit for $4.33 billion, moving the health-care giant toward its goal of boosting its three core businesses.
The deal is expected to close in the first quarter of 2017, the companies said in separate statements. The medical optics unit makes equipment used in surgeries to repair cataracts and other vision ailments, along with contact lenses. It brought in $1.13 billion in sales for Abbott in 2015.
Healthcare deals have been picking in the middle market. Clayton Dubilier & Rice agreed to invest in Drive DeVilbiss Healthcare; Horizon Pharma plc (Nasdaq: HZNP) agreed to buy Raptor Pharmaceutical Corp. (Nasdaq: RPTP); and Medtronic plc (NYSE: MDT) said it will buy HeartWare International Inc. (Nasdaq: HTWR).
J&J, the world’s biggest maker of health-care products, has been chasing deals for all three of its main businesses to boost growth and offset potential competition for prescription medicines, the largest unit at the New Brunswick, New Jersey-based company. Abbott is clearing space for its planned acquisitions of Alere Inc., a medical testing company, and St. Jude Medical Inc., another device maker.
J&J’s medical devices and diagnostics business accounted for 36 percent of revenue in 2015, down from 41 percent in 2012. Consumer products, J&J’s third major unit, had 19 percent of the company’s sales last year.
Abbot, based in Abbott Park, Illinois, paid $2.8 billion for the medical optics unit in 2009. The company has been trying to back out of its $5.8 billion deal with Alere. It has said it’s committed to acquiring St. Jude, even after a short-seller alleged that some of its heart devices have cybersecurity vulnerabilities, and expects the $25 billion deal to close before the end of the year.

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Johnson & Johnson Sees Growth in Ophthalmology, Acquires Abbott Medical Optics

Sep 16, 2016 | The Street

By Sarah Pringle

In the wake of two pending deals worth a combined $38.6 billion, Abbott Laboratories (ABT) has struck yet another multi-billion-dollar transaction that reaffirms growing interest in ophthalmology companies.
This time the Abbott Park, Ill.-based medical device giant is a seller, agreeing to divest Abbott Medical Optics to Johnson & Johnson Inc. (JNJ) for $4.325 billion in cash, according to an announcement released about an hour before the end of Friday's trading session.
The acquisition includes Abbott's ophthalmic products within the areas of cataract surgery, laser vision correction and consumer eye health, which includes products like contact solution and eye drops. The unit reported sales of $1.1 billion in 2015.
Despite growing interest in the ophthamology sector, it's difficult to say whether a multiple of four times revenue is rich or not, as there haven't been other deals of this size to compare it to.
Shares of Abbott spiked on the news, adding about 1.8% to finish Friday's trading session at $41.87 a piece. Shares of Johnson & Johnson remained relatively flat, retreating less than 1% to close at $118.25.
The deal comes as the ophthalmology industry draws increasing investor interest.
Allergan plc (AGN), among others, has also been working to bulk up its eye care business. In its latest effort, Brent Saunder's pharmaceutical company announced earlier this month a $60 million deal for RetroSense Therapeutics LLC, a biotechnology company developing gene therapy approaches to restoring vision in patients.
Private equity groups have also shown a growing interest in the sector.
In July, TPG Capital Inc. bought ophthalmology company Beaver-Visitec International Inc. Although financial terms of the transaction weren't disclosed, The Deal previously reported that the buyout shop forked out more than $500 million for the Waltham, Mass., company.
Around the same time, Santen Pharmaceutical Co. Ltd. (SNPHY) bolstered its ophthalmology business through the acquisition of InnFocus Inc., which will receive an upfront payment of $225 million plus an additional potential consideration.
For Abbott, the deal comes after the company and Alere Inc. (ALR) last week told Delaware's Vice Chancellor Sam Glasscock that they will submit their dispute over a their pending $7.9 billion merger agreement to a mediator.
Alere has accused Abbott of slowing down the federal antitrust clearance process as a way to bog down, and ultimately kill, their agreement to carry out a merger announced Feb. 1. Alere contends Abbott cooled on their transaction after Abbott agreed to pay $25 billion for St. Jude Medical Inc. (STJ) on April 28.
The Allergan-JNJ deal is anticipated to close in the first quarter of 2017, subject to closing conditions and regulatory approvals.
Morgan Stanley is providing banking advice to Johnson & Johnson on the transaction, while Cravath, Swaine & Moore LLP, the company's longtime outside counsel, is providing legal advice.
Cravath, Swaine & Moore LLP are providing counsel. Cravath has advised JNJ in the past, including on its $1.9 billion sale of Cordis Corp. to Cardinal Health Inc. (CAH) last year.
Abbott's financial adviser on the deal is Goldman, Sachs & Co., while Wachtell, Lipton, Rosen & Katz' David Lam and Victor Goldfelb are offering counsel. Wachtell's Lam is also advising Abbott on the St. Jude deal.

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Johnson & Johnson to buy Abbott vision care unit for $4.3 billion

Sep 16, 2016 | Crain's Chicago Business Journal

Abbott Laboratories is selling its Abbott Medical Optics unit to Johnson & Johnson for $4.33 billion.
The companies announced the all-cash deal today. According to a statement from New Jersey-based J&J, Abbott Medical Optics reported sales of $1.1 billion last year.
"We've been actively and strategically shaping our portfolio, which has recently focused on developing leadership positions in cardiovascular devices and expanding diagnostics," said Abbott Chairman Miles White in a statement. "Our vision care business will be well-positioned for continued success and advancement with Johnson & Johnson, and I'd like to thank our employees for building a successful business."
The acquisition will include ophthalmic products in three business segments: cataract surgery, laser refractive surgery and consumer eye health.
North Chicago-based Abbott paid $2.8 billion for the business, then known as Advanced Medical Optics, in 2009.
It's the latest in a spate of recent deals involving Abbott—though some of them have not gone smoothly, includingAbbott's stalled $5.8 billion merger with Alere.
The Wall Street Journal first reported the deal earlier today.

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Johnson & Johnson is to acquire Abbott Medical Optics

Sep 17, 2016 | Ophthalmology Times

By Jolie Higazi

Ready for some big news?
Johnson & Johnson (J&J) announced it has entered into a definitive agreement to acquire Abbott Medical Optics (AMO) for $4.325 billion in cash. AMO’s business segments include cataract surgery, laser refractive surgery, and consumer eye health, and reported sales in 2015 were $1.1 billion, according to the company.
“We’ve been keeping our eye on the eye health space for quite some time,” said Ashley McEvoy, company group chairman, responsible for Johnson & Johnson’s Vision Care Companies. “We really look to eye health as it’s one of the largest health care segments, growing north of 5%. With the acquisition of Abbott Medical Optics’ strong and differentiated surgical ophthalmic portfolio, coupled with our world-leading ACUVUE contact lens business, we will become a more broad-based leader in vision care.
"Importantly, with this acquisition we will enter cataract surgery – one of the most commonly performed surgeries and the number one cause of preventable blindness,” McEvoy added.
AMO is widely known for its IOLs and specialty in cataract surgery. With more than 100 million eyes worldwide compromised by cataract-related visual deficiencies, cataracts are of the most common surgeries performed and are the primary cause of preventable blindness.
In the refractive world, AMO also has advanced LASIK technologies designed which are aimed to enhance surgeon productivity and correct myopia, presbyopia, and astigmatism.
The acquisition also includes AMO’s consumer eye health products, which include over-the-counter dry eye drops, as well as cleaning solutions for contact lenses.
The transaction is expected to close in the first quarter of 2017. Following the expected closing, sales will be reported in the medical devices segment as a separate platform within vision care. The net impact of the acquisition is not expected to impact Abbott's overall targeted ongoing earnings per share in 2017, according to prepared statements from the companies.
"We've been actively and strategically shaping our portfolio, which has recently focused on developing leadership positions in cardiovascular devices and expanding diagnostics," said Miles D. White, chairman and chief executive officer, Abbott. "Our vision care business will be well-positioned for continued success and advancement with Johnson & Johnson, and I'd like to thank our employees for building a successful business."  
A coming home story
This is not J&J’s first rodeo with the ophthalmic space. In the 1980s, the corporation acquired IOLAB, an ophthalmic product line, and sold it to CIBA Vision in 1994. At that time, reimbursements were significantly low and deceasing in cataract areas, McEvoy said. However, reimbursement rates have been consistent over the past 10 years and cataract equipment is becoming more and more affordable, which makes the acquisition an appropriately timed "coming home" story.
It’s also a coming home story for Tom Frinzi, current senior vice president of AMO, who previously worked at J&J as a vice president and national sales manager early in his career.
Reactions from MDs
“I believe this will be a better environment for AMO. I got the impression that AMO’s purchase by Abbott was somewhat restricting in that there was a huge corporate culture from Abbott that was not interested very much in the eye care aspect of their business,” said Richard Hoffman, MD, Casey Eye Institute, Oregon Health and Science University, Eugene, OH. “The new relationship with J&J will hopefully be more ‘eye-friendly’ since many of their products are currently in the ophthalmic and optometric sphere. I am hopeful that the new relationship will be a good thing for AMO and J&J.”
Dr. Hoffman is also a member of the Ophthalmology Times editorial advisory board.
“As ophthalmologists, we understand the importance of continued innovation in the field of ophthalmology given the consistent rise in patients with eye conditions from an aging baby boomer population,” said Joshua Mali, MD, The Eye Associates, Sarasota, FL, who is also a regular blogger with Ophthalmology Times. “Therefore, I definitely support and applaud Johnson & Johnson's decision to acquire a well-established and trusted ophthalmic company in AMO. The expanded research and development budget of a pharmaceutical giant like J&J will help advance ophthalmic surgical technology and consumer eye health products to benefit our patients. Now, J&J will be a powerful player in the ophthalmic surgical space in addition to its world-class consumer health products and pharmaceutical business."

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Abbott Selling Optics Biz to J&J for $4 Billion

Sep 16, 2016 | QMed

By Chris Newmarker

Abbott Laboratories will sell its vision care business, Abbott Medical Optics, to Johnson & Johnson for more than $4 billion, the companies said Friday.
The $4.325 billion deal is expected to close in early 2017 pending customary closing conditions, including regulatory approvals. Abbott's vision care business has products for cataract surgery, laser vision correction (LASIK), and corneal care. It boasts world-classintraocular lenses used in cataract surgery.
However, Abbott has been strategically focused on developing leadership positions in cardiovascular devices and expanding diagnostics, CEO Miles White said in a news release. Abbott is in the process of acquiring St. Jude Medical and its extensive cardiovascular device portfolio for $25 billion. It also previously planned to acquire diagnostics company Alere for about $6 billion, but has apparently gotten cold feet after Alere disclosed a federal grand jury subpoena related to a U.S. Foreign Corrupt Practices Act investigation. The Abbott-Alere deal is now heading into legal mediation.
Meanwhile, Johnson & Johnson sees an opportunity to expand its offerings in eye care—an area that Ashley McEvoy, company group chairman for J&J's vision care companies, describes as "one of the largest, fastest growing and most underserved segments in health care today."
“With the acquisition of Abbott Medical Optics’ strong and differentiated surgical ophthalmic portfolio, coupled with our world-leading Acuvue contact lens business, we will become a more broad-based leader in vision care," McEvoy said in a news release. "Importantly, with this acquisition we will enter cataract surgery—one of the most commonly performed surgeries and the number one cause of preventable blindness.”

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Abbott (ABT) to Sell Abbott Medical Optics to Johnson & Johnson (JNJ) in $4.33B Deal

Sep 16, 2016 | Street Insider

Abbott (NYSE: ABT) announced today that it will sell Abbott Medical Optics, its vision care business, to Johnson & Johnson (NYSE: JNJ) for $4.325 billion in cash.
"We've been actively and strategically shaping our portfolio, which has recently focused on developing leadership positions in cardiovascular devices and expanding diagnostics," said Miles D. White, chairman and chief executive officer, Abbott. "Our vision care business will be well-positioned for continued success and advancement with Johnson & Johnson, and I'd like to thank our employees for building a successful business."
Abbott's vision business has products in areas including cataract surgery, laser vision correction (LASIK) and corneal care products (contact solution, eye drops, etc.).

The net impact of this transaction is not expected to impact Abbott's overall targeted ongoing earningsper share in 2017. This targeted earnings per share excludes the expected gain on this transaction and any costs related to the transaction. The transaction is expected to close in the first quarter of 2017 and is subject to customary closing conditions, including regulatory approvals.

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J&J’s $4.32B Abbott Medical Optics deal bolsters eye surgery business

Sep 16, 2016 | MedCity News

By Stephanie Baum

Johnson & Johnson has plunked down more than $4.32 billion to acquire Abbott Medical Optics, an Abbott Laboratories subsidiary, a news release said.
The deal is a win-win for both companies. It amplifies J&J’s vision care business and gives it access to the eye surgery market. The agreement also lets Abbott Laboratories devote more attention to its heart valve and diagnostics business. Abbott has been pre-occupied with digesting its St Jude acquisition announced in April, making the vision business less of a strategic fit.
Abbott Medical Optics has a big profile in ophthalmic products and had sales of more than $1 billion in 2015, the news release noted. Its business segments include cataract surgery, laser refractive surgery and consumer eye health.
The outlook for eye procedures is pretty strong. About 20 million people are blind from age-related cataracts and increasing life spans plus population growth means those numbers will continue to rise, according to data from the World Health Organization, cited in the news release.
“…we will become a more broad-based leader in vision care,” said Ashley McEvoy, a J&J group chairman, who oversees the vision care businesses, in the news release. “Importantly, with this acquisition we will enter cataract surgery — one of the most commonly performed surgeries and the number one cause of preventable blindness.”
Medical device industry M&A activity has been hectic, due to increased price pressure from health systems, which are also consolidating, The Wall Street Journal noted.

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Johnson & Johnson to buy Abbott Labs medical optics subsidiary for $4.3bln

Sep 16, 2016 | MarketWatch

By Emma Court

Johnson and Johnson JNJ, -0.22% said Friday afternoon it will buy Abbott Laboratories ABT, +1.70% subsidiary Abbott Medical Optics for $4.3 billion in cash. The deal, which is expected to close in the first quarter of 2017, will include ophthalmic products in the company's cataract surgery, laser refractive surgery and consumer eye health segments. Abbott Medical Optics reported 2015 sales of $1.1 billion. Johnson & Johnson's Ashley McEvoy said the acquisition was a way to become "a more broad-based leader in vision care," and described eye health as a large, quickly-growing and underserved health care segment. Johnson & Johnson shares rose 1.5% over the last three months, compared with a 2.8% rise in the S&P 500 SPX, -0.47% Abbott shares rose 1.3% in late afternoon trade after the deal was announced.

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Johnson & Johnson (JNJ) Stock Lower, Buys Abbott Laboratories' Medical Optics Unit for $4.3 Billion

Sep 16, 2016 | The Street

By Annie Palmer

Shares of Johnson & Johnson (JNJ) were declining in late-afternoon trading on Friday as the New Brunswick, NJ-based medical devices, pharmaceutical and packaged goods manufacturer agreed to buy Abbott Laboratories (ABT) medical optics' unit for $4.3 billion in cash.
Abbott is a Chicago-based company that focuses on the discovery, development, manufacturing and sale of healthcare products.
Its medical optics unit focuses on vision care, with products in areas such as cataract surgery, laser vision correction and corneal care products like contact solution and eye drops, Abbott said in a statement.
The deal isn't expected to be accretive in Abbott's 2017 earnings, the company said.
Abbott noted that the deal is expected to close in the first quarter of 2017, pending shareholder approval.
Shares of Abbott were advancing in late-afternoon trading on Friday.
Separately, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:

The team rates Johnson & Johnson as a Buy with a ratings score of A. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that it rates. The company's strengths can be seen in multiple areas, such as its solid stock price performance, revenue growth, largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels and expanding profit margins. We feel its strengths outweigh the fact that the company has had sub par growth in net income.

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Abbott (ABT) Stock Higher as Johnson & Johnson to Buy Medical Optics Unit

Sep 16, 2016 | The Street

By Amanda Schiavo

Shares of Abbott Laboratories (ABT) are higher in late afternoon trading on Friday, as the healthcare company will sell its medical optics unit to Johnson & Johnson (JNJ) for $4.325 billion in cash.
Abbott doesn't see the cash deal impacting its ongoing earnings per share target for 2017. That unit accounted for a little more than 5% of Abbott's revenue last year,BloombergTV's Julie Hyman reported on this afternoon's "Bloomberg Markets."
Johnson & Johnson expects the deal to immediately add to its EPS.
"The sale of this eye surgery unit could remove a $3 billion equity issuance overhang because of deals that Abbott is doing separately," Hyman said, citing a Stifel Nicolaus analyst.
Separately, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:

We rate ABBOTT LABORATORIES as a Buy with a ratings score of B+. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. We feel its strengths outweigh the fact that the company has had sub par growth in net income.

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J&J makes $4.3B acquisition to enter cataract surgery market

Sep 16, 2016 | NJ Biz

By Eric Strauss

New Brunswick-based health care giant Johnson & Johnson has agreed to pay $4.325 billion in cash for Abbott Laboratories' ophthalmic unit, it announced Friday.
J&J said in a news release that it has a definitive agreement to buy the Abbott Medical Optics business, which is known for its cataract surgery lenses, among other ophthalmic and laser vision surgery and eye health products. The unit reported $1.1 billion in sales in 2015, J&J said.
“Eye health is one of the largest, fastest-growing and most underserved segments in health care today,” Ashley McEvoy, company group chairman for J&J’s vision care companies, said in a prepared statement. “With the acquisition of Abbott Medical Optics’ strong and differentiated surgical ophthalmic portfolio, coupled with our world-leading Acuvue contact lens business, we will become a more broad-based leader in vision care.
“Importantly, with this acquisition, we will enter cataract surgery, and one of the most commonly performed surgeries and the No. 1 cause of preventable blindness.”
The business will become part of J&J’s Johnson & Johnson Vision Care Inc. unit, which is based in Florida and has about 3,000 employees globally.

The transaction is expected to close in the first quarter of 2017, subject to customary approvals and conditions, J&J said.

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Johnson and Johnson to acquire Abbott Medical Optics for $4.325 billion

Sep 16, 2016 | Healio

Johnson and Johnson announced that it has reached an agreement to acquire Abbott Medical Optics, a wholly owned subsidiary of Abbott Laboratories, for $4.325 billion in cash.
According to a Johnson and Johnson press release, the acquisition will include ophthalmic products in cataract surgery, laser refractive surgery and consumer eye health, including over-the-counter drops for dry eye, solutions and cleaning systems for contact lenses, IOLs and advanced laser vision technologies. In 2015, Abbott Medical Optics reported sales of $1.1 billion.
“Importantly, with this acquisition we will enter cataract surgery – one of the most commonly performed surgeries and the number one cause of preventable blindness,” Ashley McEvoy, company group chairman for Johnson and Johnson’s Vision Care Companies, said in the release.

The transaction is expected to be completed in the first quarter of 2017.

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Shares now up at $41.80 (ABT) Abbott to Sell Abbott Medical Optics to…

Sep 16, 2016 | Finance Daily

By Ted Blackburn

Abbott to Sell Abbott Medical Optics to Johnson & Johnson for $4.325 Billion.
In the market the company is trading up by 1.65% since yesterday’s close of $41.12.
Abbott Laboratories Common Stoc also recently declared a dividend for shareholders paid on Monday the 15th of August 2016. The dividend was $0.260 per share for the quarter or $1.04 annualized. The dividend yield was $2.56. The ex-dividend date was Wednesday the 13th of July 2016.
It is currently trading at $41.80 which is slightly below the 50 day moving average which is $43.53 and just a bit higher than the 200 day moving average of $41.08. The 50 day moving average was down $-1.72 or -3.94% and the 200 day average went up by +1.77%.
The P/E ratio is 27.60 and market capitalization is 61.46B.
Several Wall Street investment firms have issued ratings on Abbott Laboratories Common Stoc recently. On September 13 Jefferies left the company rating at “Buy” and lowered the price target from $49.00 to $48.00. July 14 investment analysts at Jefferies made no change to the company rating of “Buy” and moved up the price target to $49.00 from $45.00.
On June 21 the company was upgraded to “Buy” from “” by Edward Jones. On June 14 Jefferies maintained a company rating of “Buy” but moved down the price target from $47.00 to $45.00.
On April 28 the stock rating was downgraded from “” to “Buy” with a current price target of $47.00 in an announcement from Piper Jaffray. March 15 investment analysts at Jefferies made no change to the stock rating of “Buy” but raised the price expectation to $47.00 from $45.00.

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Local Coverage

Abbott sells eye surgery products unit to Johnson & Johnson

Sep 16, 2016 | Daily Herald

By Anna Marie Kukec

A unit of Libertyville Township-based Abbott said Friday it has sold a unit that makes equipment for cataract and other eye surgeries to Johnson & Johnson for about $4.3 billion in cash.
The unit includes 5,300 workers at 12 facilities worldwide, which all could transfer to Johnson & Johnson once the deal closes early next year, Johnson & Johnson spokeswoman Donna Lorenson said.
"This is an expansion for us because we have not been in this area before," Lorenson said.
Abbott's unit, called Abbott Medical Optics or AMO, makes ophthalmic products for cataract surgery, laser refractive surgery and consumer eye health. The products include eye lenses that are often used when the natural lens is removed during cataract surgery. The unit's consumer eye health products include over-the-counter drops for dry eyes, as well as multipurpose solutions and hydrogen peroxide cleaning systems for patients who wear contact lenses.
Whether all of the 5,300 employees would transfer would likely be known after the deal closes, Lorenson said.

An Abbott spokesman was not immediately available for comment.

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Broadcast Coverage

Nightly Business Report

Sep 16, 2016 | CNBC

View Clip Here: http://app.criticalmention.com/app/#clip/view/24163314?token=92d3974e-7d74-4539-a207-25f8357ca8e3
(00:18)

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Bloomberg Markets

Sep 16, 2016 | Bloomberg TV

View clip here: http://beta.criticalmention.com/app/#clip/view/24159111?token=f53835ab-efd1-43f1-b563-4ee98115c115
(1:23)

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Closing Bell

Sep 16, 2016 | CNBC

View clip here: http://app.criticalmention.com/app/#clip/share/24158609?token=4cf26a0e-0008-416f-9510-3d7a6bd71e3d
(2:01)

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