J&J to buy ENT device maker Acclarent for $785 million

Ethicon Inc, a subsidiary of global healthcare giant Johnson & Johnson (J&J) and a worldwide leader in surgical care, has agreed to acquire Acclarent Inc, a privately held medical firm specialising in devices for ear, nose and throat (ENT), in an all-cash transaction amounting approximately $785 million, J&J said in a statement.

California-based Acclarent is global medical technology company dedicated to design, development and commercialisation of innovative ENT devices.

It is a portfolio company of New Enterprise Associates Inc (NEA), a leading global venture capital firm with approximately $11 billion in committed capital in over 650 promising companies covering sectors such as information technology, healthcare and energy. Acclarent was established in 2004 and employs around 325 people.

Acclarent's primary focus is on novel endoscopic catheter-based surgical tools-balloon sinuplasty-devices which provide alternatives to conventional medical therapy and endoscopic surgical approaches. The sinus balloon catheter is gradually inflated to gently restructure the previously blocked nasal passage, maintaining the integrity of the sinus lining and restoring normal sinus drainage and function.

Ethicon is a leader in surgical equipment and has introduced innovations in wound closure, general surgery, wound management, women's health and urology and aesthetic medicine.

The merger provides a new growth platform in ENT for Ethicon through Acclerent's broad product portfolio.

Gary Pruden, company group chairman for J&J with responsibility for the Ethicon business worldwide, said, ''Understanding and addressing customers' unmet needs through innovation is a hallmark of both Acclarent and Ethicon's success.''

''This transaction represents an important growth opportunity for our business in an area where there were previously limited solutions available to patients,'' Pruden added. 

Acclarent's president and chief executive William M Facteau said that millions of people suffer from ENT conditions, such as chronic sinusitis and obstructive sleep apnea. The opportunity to become part of Ethicon would enable Acclarent to continue to innovate and expand its reach so that more physicians and patients worldwide would benefit from the technology.

The boards of both companies and the shareholders of Acclarent have approved the deal which is expected to close in the first quarter of 2010 subject to regulatory approvals. Upon closing, it is expected to dilute J$J's 2010 earnings per share by approximately $0.03-0.04, the statement said.

New Jersey-based J&J is a global healthcare giant with over 250 companies and 117,000 employees and operating in three broad market segments: consumer, pharmaceutical and diagnostics bringing innovative ideas, products and services.

In order to bolster its revenue which is affected by drop in sales of its blockbuster drugs due to patent expiry and generic competition, the healthcare giant has been resorting to acquisition of new products and technologies.

J&J's acquisitions during the past one year include breast implant maker Mentor Corp (See: J&J buys breast implant maker Mentor Corp for $1.07 billion),  Elan Corp (See: J&J to invest $1.5 billion in Elan's Alzheimer's drugs) which is developing drug for Alzheimer's disease, vaccine maker Crucell and cancer drug developer Cougar Biotech.

Since its acquisition of Pfizer Consumer Healthcare in 2006 for $16.6 billion (See: J&J to acquire Pfizer Consumer Healthcare for $16.6 billion)  some of J&J's other acquisitions include maker of biosurgical sealants for the prevention of homeostasis in surgery, Omrix (See: Johnson & Johnson acquires Omrix Biopharmaceuticas for $465 million), Chinese government stake in cosmetics and skin care products maker Beijing Dabao (See: Johnson & Johnson (China) Investment Co., Ltd. Acquires Beijing Dabao Cosmetics Co., Ltd)  and Swedish developer of in vitro diagnostic technologies Åmic (See: Johnson & Johnson Nordic AB acquires Åmic)