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link to The Press Release
Post-deal numbers…
- The largest combined Orthopedics company by a mile
- Largest acquisition in J&J history
- Merger will affect 22,000 employees worldwide
- J&J/Depuy + Synthes = 28% market share in orthopedics (by comparison: SYK has 14% and ZMH has 13%)
- Chairman Dr. Hansjorg Wyss, who controls 48% of Synthes, is now the richest man in Switzerland with a fresh $10B
- Deal represents a 22% premium over the stock value before the announcement
- J&J is paying 5.4X Synthes gross sales in 2010
- The stock transaction details – each share of Synthes common stock exchanged would be converted into 55.65 francs in cash, plus not more than 1.9672 and not fewer than 1.7098 shares of J&J common stock
- The Acquisition will allow J&J to add 5% to its 2012 earnings
Pre-deal numbers…
- J&J market cap was $165B
- J&J had $19B in cash
- Synthes market cap was $19B and carried only $98M in debt
- Synthes 2010 sales was $3.7B
- Synthes is said to own 50% of the sales of the plates and screws in trauma
- The $5.5B trauma market grew 8% in 2010
Other considerations…
- J&J may have to divest some trauma assets to get regulatory clearance for the deal
- The AO Foundation, which works exclusively for Synthes in the areas of research and development, has said a deal would not initially result in any change and existing contractual obligations would have to be assumed by the new company.
- Goldman Sachs is advised J&J with the deal
- Credit Suisse is advising Synthes with the deal