Johnson & Johnson said Wednesday it would buy robotic surgery settle down Auris Health for $3.4 billion in cash.
The purchase gives J&J, one of the world’s largest maker of health products, an competitor into robotics and builds on the company’s partnership with Alphabet’s Verily.
“In this new era of health care, we’re aiming to make easy surgery, drive efficiency, reduce complications and improve outcomes for patients, ultimately making surgery safer,” revealed Ashley McEvoy, company group chair of consumer medical devices, in a press release. “Collectively, these technologies, together with our market-leading medical inculcates and solutions, create the foundation of a comprehensive digital ecosystem to help support the surgeon and patient before, during and after surgery.”
The enterprise is divided in three main business units: pharmaceuticals, medical devices and consumer products. J&J’s medical device concern has been lagging, with sales falling 4 percent to $6.67 billion in the fourth quarter of 2018. The health-care throng has vowed to improve performance through acquisitions and divestitures.
Last year, J&J divested its LifeScan blood glucose praepostor business after exiting the insulin pump market.
Bloomberg reported last month that J&J was pursing an gain of Auris Health, a privately held developer of robotic technologies. J&J said Wednesday it’s creating a “connected digital ecosystem” that powers data and robotic technology to guide surgeon through procedures and improve patient treatment.
The surgical instruments vocation is expected to reach more than $12 billion by 2025, with the biggest players in the space including J&J, Medtronic, and Intuitive Surgical.
J&J CEO Alex Gorsky notable in a fourth-quarter earnings call last month that investors would see “continued news about our robotics rostrum over the course of 2020 and beyond.”
“What we want to make sure is that we get out in a timely manner,” he said, “but that we’re also out in a civility that ensures we’re competitive and ensures, ultimately, that we’re making an even bigger difference in this area as we go saucy.”
The transaction is expected to close by the end of the second quarter of 2019.
J&J’s stock was slightly higher in premarket trading Wednesday. The stock is up virtually 4 percent since the beginning of this year. Shares are more than 2 percent higher over the last 12 months.
–CNBC’s Angelica LaVito role ined to this report.