Dive Brief:
- Integra Lifesciences reached an agreement to buy Johnson & Johnson’s ear, nose and throat (ENT) subsidiary Acclarent for $275 million in cash, the company announced Wednesday.
- Integra CEO Jan De Witte said the acquisition provides “a rare opportunity to become a key player in the ENT segment.”
- For J&J, the divestment comes as the company looks to focus its medtech portfolio on the highest growth segments.
Dive Insight:
Princeton, New Jersey-based Integra largely sells neurosurgery devices, but it also has a line of surgical instruments for ENT procedures called MicroFrance. With the purchase of the Acclarent business, Integra will gain access to balloon technologies to dilate the sinus and the eustachian tube, as well as surgical navigation systems, RBC Capital Markets analyst Shagun Singh wrote in a research note.
Integra said the purchase will make it one of the leading providers of ENT products and technologies. It plans to pay $275 million in cash at closing and an additional $5 million if certain regulatory milestones are met.
BTIG analyst Ryan Zimmerman wrote that Acclarent is one of the largest balloon sinus dilation providers, adding that the technology would require an entirely separate salesforce.
Integra did not say how the deal would affect its finances but plans to share more detailed forecasts upon closing. Acclarent had 2022 revenues of $110 million, the company said, and gross margins about in line with Integra’s company average.
J&J bought Acclarent in 2010 for $785 million, “so for [Integra] to pick this up for $275M isn’t a bad price,” Zimmerman wrote.
Singh viewed the divestment as a positive for J&J, as its medtech “portfolio pruning continues to demonstrate the company's shift in focus to higher-growth end-markets.”
The transaction is expected to close in the first half of 2024, subject to customary closing conditions and regulatory approvals. Transition manufacturing services would be provided for up to four years after that.
