USA — Leading healthcare company Abbott Laboratories plans to acquire medical-device company Cardiovascular Systems Inc. (CSI), a medical device maker for peripheral and coronary artery disease in a deal that will strengthen Abbott’s vascular disease offerings.

Per the deal terms, Abbott will pay US$20 per share for the acquisition, which translates into an equity value of about US$890M.

The move comes at a time when Abbott is struggling to lift its sales amid the moderation in COVID-19 testing-related sales.

The offer reflects a premium of approximately 50% from Cardiovascular Systems’ closing price of US$13.31 on Wednesday, February 8.

Following the announcement, CSI stock soared over 48% in the after-hours of trading. Meanwhile, Abbott’s stock remained relatively flat.

Notably, Abbott’s worldwide medical device sales increased by 2.2% in 2022. Also, organic sales improved by 8.1%. However, vascular device sales declined by 6.4%, reflecting weakness in the U.S. market.

Abbott medical devices executive vice president Lisa Earnhardt said: “The acquisition of CSI will add new, complementary technologies to Abbott’s leading vascular device offerings.”

Abbott expects the acquisition to be neutral to its 2023 earnings per share (EPS) guidance. Earlier, Abbott said it expects to report adjusted EPS in the range of US$4.30 to US$4.50 for 2023.

The moderation in COVID-19-related sales, supply chain headwinds, and adverse currency movements could continue to pose short-term challenges.

However, its strong medical device product portfolio and resilient business model augur well for long-term growth. Abbott is also a dividend aristocrat. It increased its dividend for 51 consecutive years. 

Abbott officials view the planned purchase as complementary to the company’s cardiovascular offerings.

CSI manufactures devices for atherectomy, a minimally invasive treatment for removing plaque buildup in arteries, which can restrict blood flow, and its portfolio includes the Diamondback 360 — a major system for atherectomy.

Atherectomy procedures may enhance the benefits of standard balloon angioplasty or stent treatments in restoring blood flow in complex arterial disease. Health providers use it in addition to or as an alternative to balloon angioplasty.

CSI also has a pipeline of complementary vascular intervention devices in the early stages of development.

CSI announced the commercialization of its intravascular lithotripsy (IVL) systems for the treatment of calcific coronary and peripheral artery disease in January of last year.

Furthermore, CSI in collaboration with its partner OrbusNeich Medical has received premarket approval from the US Food and Drug Administration (FDA) for the Scoreflex scoring balloon.