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Abbott (ABT) to Expand Vascular Device Line With New Buyout
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Abbott Laboratories, Inc. (ABT - Free Report) recently entered into a definitive agreement to acquire Cardiovascular Systems -- a medical device company with an innovative atherectomy system. The deal will help Abbott gain access to Cardiovascular System's leading atherectomy system to treat vascular disease.
The acquisition is likely to expand Abbott’s Vascular device solutions offering.
Financial Details
Per terms of the agreement, Cardiovascular System stockholders will get $20 per common share at a total expected equity value of around $890 million.
The transaction has been approved by the boards of directors of Cardiovascular System and Abbott. Still, it is subject to the approval of Cardiovascular System stockholders and the satisfaction of customary closing conditions, including applicable regulatory approvals.
Upon closing, the deal is expected to be neutral to Abbott's recently issued 2023 ongoing earnings per share guidance. The company expects full-year adjusted earnings (excluding specified items of $1.25 per share) to be in the range of $4.30 to $4.50.
About Cardiovascular System
Cardiovascular Systems is a medical device company that develops and commercializes innovative solutions for treating vascular and coronary disease. The company's orbital atherectomy system treats calcified and fibrotic plaque in arterial vessels throughout the leg and heart. It addresses many of the limitations associated with existing surgical, catheter and pharmacological treatment alternatives.
Strategic Implications
Per Abbott’s management, the acquisition of Cardiovascular System will add new, complementary technologies to Abbott's leading vascular device offerings. Cardiovascular System has a talented and experienced team and a leading atherectomy system that will enable Abbott to provide physicians with more tools to aid patients to live fuller lives.
Image Source: Zacks Investment Research
Upon closing of the acquisition, Cardiovascular System's offering will support Abbott's ability to provide better care for patients with peripheral and coronary artery disease.
Industry Prospects
Per a report by Allied market Research, the global vascular disease devices market was valued at $26.52 billion in 2020 and is projected to reach $ 51.80 billion by 2030, registering a CAGR of 6.50%.
The advancements in vascular devices and improved healthcare infrastructure are expected to drive the market.
Recent Developments
In February, Abbott announced two approvals as part of its growing suite of electrophysiology products in the global market. The company’s TactiFlex Ablation Catheter, Sensor Enabled — the world’s only ablation catheter with a flexible tip and contact force sensing, received CE Mark1 for treating people with abnormal heart rhythms like atrial fibrillation (AFi). Abbott’s FlexAbility Ablation Catheter, Sensor Enabled, also recently secured an expanded indication2 for treating patients with a complex heart condition by the FDA.
In January 2023, Abbott announced the receipt of Proclaim XR spinal cord stimulation (SCS) system to treat painful diabetic peripheral neuropathy (DPN) --- a debilitating complication of diabetes. The Proclaim XR SCS system can give relief to DPN patients in need of alternatives to traditional treatment approaches, such as oral medication.
Price Performance
Shares of the company have lost 11.9% in the past six months compared with the industry’s fall of 37.2%.
Zacks Rank and Key Picks
Currently, Abbott carries a Zacks Rank #3 (Hold).
Two better-ranked stocks in the broader medical space are AMN Healthcare Services, Inc. (AMN - Free Report) and Cardinal Health, Inc. (CAH - Free Report) .
AMN Healthcare, carrying a Zacks Rank #2 (Buy) at present, has an estimated long-term growth rate of 3.3%. AMN’s earnings surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average beat being 10.9%.
AMN Healthcare has gained 5.4% against the industry’s 19.6% decline in the past year.
Cardinal Health, carrying a Zacks Rank #2 at present, has an estimated long-term growth rate of 11.6%. CAH’s earnings surpassed estimates in two of the trailing four quarters and missed the same in the other two, the average beat being 6.4%.
Cardinal Health has gained 48.7% against the industry’s 0.8% decline over the past year.
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Abbott (ABT) to Expand Vascular Device Line With New Buyout
Abbott Laboratories, Inc. (ABT - Free Report) recently entered into a definitive agreement to acquire Cardiovascular Systems -- a medical device company with an innovative atherectomy system. The deal will help Abbott gain access to Cardiovascular System's leading atherectomy system to treat vascular disease.
The acquisition is likely to expand Abbott’s Vascular device solutions offering.
Financial Details
Per terms of the agreement, Cardiovascular System stockholders will get $20 per common share at a total expected equity value of around $890 million.
The transaction has been approved by the boards of directors of Cardiovascular System and Abbott. Still, it is subject to the approval of Cardiovascular System stockholders and the satisfaction of customary closing conditions, including applicable regulatory approvals.
Upon closing, the deal is expected to be neutral to Abbott's recently issued 2023 ongoing earnings per share guidance. The company expects full-year adjusted earnings (excluding specified items of $1.25 per share) to be in the range of $4.30 to $4.50.
About Cardiovascular System
Cardiovascular Systems is a medical device company that develops and commercializes innovative solutions for treating vascular and coronary disease. The company's orbital atherectomy system treats calcified and fibrotic plaque in arterial vessels throughout the leg and heart. It addresses many of the limitations associated with existing surgical, catheter and pharmacological treatment alternatives.
Strategic Implications
Per Abbott’s management, the acquisition of Cardiovascular System will add new, complementary technologies to Abbott's leading vascular device offerings. Cardiovascular System has a talented and experienced team and a leading atherectomy system that will enable Abbott to provide physicians with more tools to aid patients to live fuller lives.
Image Source: Zacks Investment Research
Upon closing of the acquisition, Cardiovascular System's offering will support Abbott's ability to provide better care for patients with peripheral and coronary artery disease.
Industry Prospects
Per a report by Allied market Research, the global vascular disease devices market was valued at $26.52 billion in 2020 and is projected to reach $ 51.80 billion by 2030, registering a CAGR of 6.50%.
The advancements in vascular devices and improved healthcare infrastructure are expected to drive the market.
Recent Developments
In February, Abbott announced two approvals as part of its growing suite of electrophysiology products in the global market. The company’s TactiFlex Ablation Catheter, Sensor Enabled — the world’s only ablation catheter with a flexible tip and contact force sensing, received CE Mark1 for treating people with abnormal heart rhythms like atrial fibrillation (AFi). Abbott’s FlexAbility Ablation Catheter, Sensor Enabled, also recently secured an expanded indication2 for treating patients with a complex heart condition by the FDA.
In January 2023, Abbott announced the receipt of Proclaim XR spinal cord stimulation (SCS) system to treat painful diabetic peripheral neuropathy (DPN) --- a debilitating complication of diabetes. The Proclaim XR SCS system can give relief to DPN patients in need of alternatives to traditional treatment approaches, such as oral medication.
Price Performance
Shares of the company have lost 11.9% in the past six months compared with the industry’s fall of 37.2%.
Zacks Rank and Key Picks
Currently, Abbott carries a Zacks Rank #3 (Hold).
Two better-ranked stocks in the broader medical space are AMN Healthcare Services, Inc. (AMN - Free Report) and Cardinal Health, Inc. (CAH - Free Report) .
AMN Healthcare, carrying a Zacks Rank #2 (Buy) at present, has an estimated long-term growth rate of 3.3%. AMN’s earnings surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average beat being 10.9%.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
AMN Healthcare has gained 5.4% against the industry’s 19.6% decline in the past year.
Cardinal Health, carrying a Zacks Rank #2 at present, has an estimated long-term growth rate of 11.6%. CAH’s earnings surpassed estimates in two of the trailing four quarters and missed the same in the other two, the average beat being 6.4%.
Cardinal Health has gained 48.7% against the industry’s 0.8% decline over the past year.