Johnson & Johnson Buys DePuy for $3.5 Billion

Johnson & Johnson has agreed to buy DePuy Inc. for $35 per share, or $3.5 billion.

After six months of nearly flat sales, Johnson & Johnson had been looking for another medical device company to jump-start its lagging top-line growth, and the planned acquisition of DePuy was expected to go some way toward helping the company return sales growth to double digits.

With 1997 sales of around $770 million, DePuy, based in Warsaw, IN, is among the world's largest makers of products designed to reconstruct damaged or diseased joints, repair bone fractures and correct spinal injuries.

With 1997 sales of $22.6 billion, Johnson & Johnson is a highly diversified medical product company with a line that ranges from prescription drugs to Band-Aids and contact lenses. The corporation, based in Brunswick, NJ, has over 180 operating companies.

Larsen said the new orthopedic entity would be known as DePuy, a Johnson & Johnson Company, and would join another Johnson & Johnson affiliate, Codman & Shurtleff, under the umbrella of Johnson & Johnson Professional.

James Lent, chairman and chief executive officer of DePuy, will have responsibility for Johnson & Johnson Professional as a company group chairman of Johnson & Johnson. Michael Dormer, president and chief operating officer of DePuy, will become president of the new worldwide orthopedic entity.