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J&J in Inverness talks
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May 9, 2001: 11:34 a.m. ET
Health care company seeks to buy Inverness segments for $1.3 billion
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NEW YORK (CNNfn) - Johnson & Johnson announced Wednesday it is in advanced talks to acquire certain businesses of Inverness Medical Technology in a $1.3 billion stock swap.
Terms of the deal call for Inverness shareholders to receive Johnson & Johnson shares valued at $35 each, plus common stock interest. The $35 share price represents a 20 percent premium to Inverness average share price for the prior 20 days, the companies said in a statement.
Waltham, Mass.-based Inverness (IMA: up $1.14 to $37.05, Research, Estimates) develops and markets products for diabetes self-management, as well as a line of women's health products. As part of the deal, Inverness will split off its women's health, nutritional supplements, and clinical diagnostics segments to form a new publicly traded firm.
New Brunswick, N.J.-based Johnson & Johnson (JNJ: up $0.08 to $98.03, Research, Estimates) which makes consumer products such as Tylenol and Band-Aid bandages, is negotiating to buy Inverness diabetes segments. The deal includes Inverness's electrochemical blood glucose meter and strip business as well as LXN Corp. and Integ.
The negotiations for Inverness follow Johnson & Johnson's buy of Alza Corp. for about $10.5 billion in stock in March.
Johnson & Johnson plans to take a one-time charge this year of about $100 million, or 7 cents a share, associated with in-process research and development. The company also estimates dilution of 2 cents in 2001 and in 2002, but the deal will add to earnings thereafter, Johnson & Johnson said. 
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