St. Jude Medical to acquire Thoratec for $3.4 billion in cash

St. Jude Medical agreed to acquire Thoratec for approximately $3.4 billion to expand its heart failure business. When the deal is finalized, Thoratec shareholders will receive $63.50 per share in cash, a 10 percent increase over Thoratec’s closing price the day before the announcement.

St. Jude said in a news release that Thoratec is a leader in the ventricular assist device market, which is estimated at around $750 million worldwide. Thoratec offers mechanical circulatory support technology to treat advanced heart failure. Its products include the HeartMate left ventricular assist device and the paracorporeal ventricular assist device. The company’s devices have been implanted in more than 20,000 patients.

The Heart Mate, a continuous flow device, is approved for bridge-to-transplantation and destination therapy and is the most widely-used left ventricular assist device in the U.S. The paracorporeal ventricular assist device is approved for bridge-to-transplantation and post-cardiotomy recovery from open heart surgery.

Thoratec also recently received conditional approval from the FDA to begin a trial testing a percutaneous heart pump (HeartMate PHP) for use in high-risk PCI procedures. The HeartMate PHP is already approved in Europe.

St. Jude’s heart failure portfolio includes a quadripolar cardiac resynchronization therapy, remote monitoring capabilities and CardioMEMS HF System. In 2014, the FDA approved the miniature CardioMEMS device to treat heart failure patients.

During the second quarter of 2015, St. Jude had approximately $20 million in CardioMEMS HF System sales, according to the company.

Per terms of the agreement, Thoratec can solicit other offers through Aug. 20. Thoratec must pay St. Jude $30 million if it finds a better offer by that time and $111 million if it finds a better offer after Aug. 20.