Integra LifeSciences has agreed to purchase Johnson & Johnson (J&J) subsidiary Codman Neurosurgery for $1.05 billion, with plans to build a more comprehensive neurosurgery portfolio and expand its international foothold. Integra will acquire Codman’s devices for the surgical treatment of brain tumors, hydrocephalus, and other neurological disorders, but the deal excludes Codman’s neurovascular and drug delivery products.
Codman Neurosurgery and Neurovascular company is one of J&J’s DePuy Synthes companies, and currently offers a line of advanced hydrocephalus, electrosurgical devices and neuro-critical care solutions that will complement Integra’s existing portfolio of tissue ablation, dural repair, and cranial stabilization solutions, said Integra CEO Peter Arduini. The combined portfolios and pipelines will expand Integra’s global market presence and will enable the company to generate an additional 30 percent in sales from international markets.
“This proposed transformational acquisition of Codman Neurosurgery creates compelling value for our shareholders, employees, and patients,” said Arduini in a press release. “Its innovative portfolio and global reach will enable us to enhance our position in the neurosurgery market, while also building a global infrastructure that will benefit Integra as a whole. We look forward to welcoming the more than 600 employees at Codman Neurosurgery to the Integra team.”
The proposed transaction does not include Codman’s neurovascular and drug delivery businesses, a spokesman from J&J told Reuters. If approved, the deal will close in the fourth quarter of 2017.
Since the spinoff of its spine business in 2014, Integra LifeSciences has been gradually executing what Arduini calls “strategic changes” to build strong platforms in core businesses, aimed at achieving longer-term growth in orthopedic and tissue technologies businesses. Integra also acquired Ear, Nose, and Throat (ENT) and laproscopic instrument product lines from Medtronic in 2014.
The deal with J&J is the second substantial deal Integra LifeSciences has announced this year. In January, the company announced a $204 million deal to acquire Derma Sciences and its line of advanced wound and burn care and tissue regeneration technology.
Meanwhile, J&J is in the midst of rescaling and restructuring its medical device business with strategic divestments, acquisitions, and partnerships. According to CEO Alex Gorsky, the company is currently evaluating options for its diabetes device portfolio. Moving forward, the company intends to focus on primary drivers: orthopedics, surgery, and vision care.
J&J also is in process of negotiating its biggest deal ever, said Reuters, with the potential purchase of Swiss biotech company Actelion. J&J is expected to pay upwards of $30 billion to complete the deal.