J&J to acquire Inverness unit for $1.3 billion

J&J to acquire Inverness Med's diabetes unit for $1.3 billion

Johnson & Johnson has moved from being in advanced discussions (Marketletter May 14) to entering into a definitive agreement to acquire the diabetes care products business of Inverness Medical Technology for $1.3 billion. J&J said the deal would be a stock-for-stock transaction that would give Inverness shareholders about $35 per share, plus a common stock interest in the new company. If completed, the deal will exclude Inverness' women's health, nutritional supplements and clinical diagnostics divisions which are to be split off to form a new publicly-traded company.

J&J said it will take a one-time charge in 2001 of about $100 million or $0.07 per share, primarily associated with the write-off of in-process R&D. Excluding the charges, the company said it remains comfortable with its previous earnings guidance in the middle of analysts' estimates for this year, which range between $3.85 and $3.90, and a consensus of $4.35 for 2002.