Abbott Laboratories announced it will acquire Cardiovascular Systems, Inc. (CSI) for $890 million Thursday morning.
CSI is a medical device company based in St. Paul, Minnesota that manufactures products for atherectomy, a minimally-invasive heart procedure. The company also has an early-stage pipeline of complementary vascular intervention devices in its pipeline.
Abbott said it plans to utilize CSI’s product offerings to improve care outcomes for patients with peripheral and coronary artery disease.
The deal is expected to be neutral to Abbott’s 2023 earnings per share (EPS) guidance upon closing. The boards of directors for both companies have already greenlit the deal, which is now subject to approval by CSI shareholders, customary closing conditions and regulatory approvals.
“The acquisition of CSI will add new, complementary technologies to Abbott’s leading vascular device offerings,” Lisa Earnhardt, EVP of medical devices at Abbott, said in a statement. “CSI has a talented and experienced team and a leading atherectomy system that will allow Abbott to provide physicians more tools to help patients live fuller lives.”
For his part, CSI CEO Scott Ward said the acquisition by Abbott holds promise for the “commercialization of innovative solutions for treating complex peripheral vascular disease and coronary artery disease.” J.P. Morgan Securities LLC served as a financial advisor to CSI during the deal-making process.
The CSI transaction was announced weeks after Abbott released its most recent earnings report, highlighted by declines in revenues due to a drop in COVID-19 testing-related sales.
Abbott’s earnings were released days after the Department of Justice opened a criminal probe into the company regarding conduct at an infant formula plant in Sturgis, Michigan that contributed to a severe nationwide shortage in early 2022.
The company said the infant formula controversy weighed on the total sales for both its Nutrition and Pediatric Nutrition divisions throughout the year. Pediatric Nutrition sales fell 19% in 2022, declining nearly 29% in the U.S. while domestic sales of certain infant formula products affected by the manufacturing disruptions totaled $479 million for 2022, well below the $1.22 billion recorded in 2021.
Abbott added that its quarterly EPS was $0.59.