Medtronic, HeartWare complete $1.1 billion deal

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Medtronic completed its acquisition of HeartWare International on Aug. 22, a deal intended to expand the company’s heart failure business.

Medtronic agreed to pay $58.00 in cash for each outstanding share of HeartWare’s common stock. The deal is valued at approximately $1.1 billion.

On June 27, Medtronic announced it had agreed to acquire HeartWare, which manufactures the HVAD System, a small, less invasive ventricular assist device.

Two days later, HeartWare voluntarily recalled more than 18,000 of its ventricular assist device after discovering the batteries may lose power prematurely. It was the latest in a series of recalls in recent years, including a Class I recall in June 2015 of 1,763 HeartWare devices.

Still, Medtronic said acquiring HeartWare would be beneficial in growing its heart failure portfolio.

Medtronic noted that the market for ventricular assist devices was approximately $800 million per year and would grow in the mid to high single digits in 2016 and 2017. For 2017 and beyond, Medtronic expects the market to grow in the single to low double digits per year.

Approximately five million people in the U.S. have heart failure, and Medtronic expects the number to grow to beyond eight million by 2030.

With the closing of the HeartWare deal, Medtronic said it does not intend to change its FY2017 revenue or earnings per share guidance. The company added that the acquisition should be accretive to earnings in year three and have minimal to no net earnings dilution during the first two years.