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St. Jude Agrees to Buy AGA Medical for $1.04 Billion

Monday, 18 Oct 2010 01:59 PM

St. Jude Medical Inc. said Monday it will boost its cardiovascular business by buying rival heart device maker AGA Medical Holdings Inc. for $1.04 billion, or $20.80 per share.

In the cash and stock deal, St. Jude is offering a premium of 41 percent compared to AGA's latest closing price. St. Jude is also taking on $225 million in debt held by AGA, and it expects the deal to close by year-end.

The St. Paul, Minn., company is one of the world's biggest heart device makers. It said AGA will become part of its cardiovascular business, which makes vascular closure and heart valve products and reported $323 million in sales in 2009. That's less than 10 percent of St. Jude's total revenue, and its sales were little changed from 2008.

AGA makes devices used to repair structural heart defects and treat vascular diseases. Its products are primarily used to treat heart problems in children, but AGA also is trying to get some of its products approved to treat strokes or aneurysms caused by different heart defects. If it is successful, it believes sales could rise into the billions.

The company reported $199 million in revenue in 2009 and expects $217 million to $226 million in 2010. St. Jude expects its revenue to grow more than 10 percent in 2011.

St. Jude's largest business sells heart rhythm management devices like pacemakers and implantable defibrillators. Another St. Jude business makes devices that treat atrial fibrillation, a condition that makes the upper chambers of the heart contract irregularly, potentially causing strokes.

The company reported a total of $4.68 billion in revenue in 2009, with $1.58 billion in heart rhythm device sales and $628 million in atrial fibrillation device sales.

Shares of AGA closed at $14.71 Friday, and have traded between $11.61 and $18.95 since the company went public in October 2009. The Plymouth, Minn., company had 50.2 million shares on the market as of Aug. 3.

In morning trading, AGA Medical shares climbed $5.97, or 41 percent, to $20.68. St. Jude shares fell 13 cents to $39.77.

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St. Jude Medical Inc. said Monday it will boost its cardiovascular business by buying rival heart device maker AGA Medical Holdings Inc. for $1.04 billion, or $20.80 per share. In the cash and stock deal, St. Jude is offering a premium of 41 percent compared to AGA's...
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Monday, 18 Oct 2010 01:59 PM
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