On Wednesday, Johnson & Johnson (NYSE: JNJ) announced that its subsidiary, Ethicon, had entered a definitive agreement to acquire Auris Health, a robotic technology firm, initially focused on lung cancer.

Management believes this acquisition will accelerate Johnson & Johnson’s entry into robotics, with potential for growth and expansion into other interventional applications.

Under the terms of the agreement, Ethicon is acquiring Auris for approximately $3.4 billion in cash. Additional contingent payments of up to $2.35 billion, in the aggregate, may be payable upon reaching certain predetermined milestones.

Johnson & Johnson is creating a connected digital ecosystem centered around using data to improve patient outcomes that leverages world-class robotic technology. This ecosystem will empower patients to take charge of their health, guide surgeons through procedures and help them advance their skills and enable health care systems to deliver more consistent procedures while also managing costs.

The transaction is expected to close by the end of the second quarter of 2019.

Ashley McEvoy, executive vice president and worldwide chair of Johnson & Johnson’s Medical Devices unit, commented:

In this new era of health care, we’re aiming to simplify surgery, drive efficiency, reduce complications and improve outcomes for patients, ultimately making surgery safer. We believe the combination of best-in-class robotics, advanced instrumentation and unparalleled end-to-end connectivity will make a meaningful difference in patient outcomes.

Shares of Johnson & Johnson were last seen trading at $134.61, in a 52-week range of $118.62 to $148.99. The consensus analyst price target is $144.22.

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