Medtronic Moves to Acquire Heartware

Heartware International (NASDAQ: HTWR) is watching its shares absolutely skyrocket in Monday’s session despite the huge market downturn from the Brexit. This surge is the result of Medtronic PLC (NYSE: MDT) moving to acquire Heartware. The companies announced that they have entered into a definitive merger agreement under which Medtronic will acquire HeartWare in a transaction valued at approximately $1.1 billion.

Under the terms of the agreement, Medtronic will commence a tender offer for all outstanding shares of HeartWare common stock for $58.00 per share, in cash.

Both boards of directors have unanimously approved the transaction, which is expected to close during Medtronic’s second fiscal quarter ending in October 2016. The transaction is subject to customary closing conditions.

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By making this acquisition Medtronic is looking to expand its portfolio of diagnostic tools, therapies and services for patients suffering from heart failure. Ultimately, Medtronic has its eyes on HeartWare’s flagship product, the HVAD System, which features the world’s smallest full-support ventricular assist device (VAD) and is designed to reduce surgical invasiveness, improve patient recovery times and enhance patient outcomes.

Mike Coyle, executive vice president and President of the Cardiac and Vascular Group at Medtronic, commented:

The addition of HeartWare’s innovative portfolio adds to our expanding portfolio of diagnostics, therapeutics and services that address heart failure patients. The team at HeartWare has established excellent relationships with its hospital customers and built a strong position and reputation in the marketplace. This transaction, once closed, will be a further, important step toward Medtronic offering a complete suite of solutions to address patient needs across the heart failure care continuum.

Shares of Medtronic were last trading down 1.8% at $81.76, with a consensus analyst price target of $88.75 and a 52-week trading range of $55.54 to $86.31.

Shares of Heartware were recently trading up over 90% at $57.48, with a consensus analyst price target of $39.58 and a 52-week trading range of $25.02 to $94.15.

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