A Medical Device Daily

Blocked in its recent attempt to acquire Guidant (Indianapolis) and thereby expand on its medical device holdings,Johnson & Johnson (J&J; New Brunswick, New Jersey) yesterday reported a major move in the opposite direction. It said it has agreed to acquire Pfizer Consumer Healthcare (PfizerCH; Morris Plains, New Jersey) for $16.6 billion in cash.

The J&J board has approved the transaction, which is subject to various customary clearances, including the Hart-Scott-Rodino Antitrust and European Union merger clearances. The deal is expected to close by the end of 2006.

PfizerCH's global personal care and OTC products recorded sales of $3.9 billion in 2005. It says that its market-leading brands include Listerine oral care products and the Nicorette line of smoking cessation treatments. Other widely recognized products include Lubriderm, Visine, Neosporin, Sudafed, Zantac and Benadryl.

“This combination creates the world's premier consumer healthcare company,” said William Weldon, CEO and chairman of J&J. “This acquisition builds upon our broad base in healthcare products and our leadership objectives in the consumer, pharmaceutical, and medical devices and diagnostics markets.”

PfizerCH adds a portfolio of brands that provide J&J, it said, “with leadership positions in nine additional categories,” including smoking cessation and mouthwash.

“We see the consumer healthcare markets as increasingly attractive growth opportunities as consumers take greater interest in and responsibility for their own health,” Weldon said. “In addition, higher levels of disposable income in developing nations are helping drive increased demand for consumer health products.”

The PfizerCH brands add to J&J's OTC products, which include Band-Aid, Tylenol, Reach, Splenda, and the Clean & Clear, Aveeno and Neutrogena skin care brands.

The acquisition is expected to be accretive to J&J's earnings per share on a cash basis in 2009.

In other dealmaking activity, Almost Family (Louis-ville, Kentucky) reported acquiring the assets and operations of Baptist Home Health Care (Birmingham, Ala-bama), a home health agency affiliated with the Baptist Health Care System of Alabama (also Birmingham). Transaction terms were not disclosed.

Mark Bryan, COO of Baptist Health, said “We were very selective in choosing a nationally recognized home health provider with a long track record of high-quality service to patients.”

Almost Family said the purchase is its sixth home health agency acquisition in the last 18 months and that it will continue to seek “attractive home health agency acquisition candidates.” The acquired agency generated around $1.7 million in Medicare revenue in the last 12 months. It is not expected to have a material effect on Almost Family's results in 2006, the company said.

Almost Family has 57 service locations in Florida, Kentucky, Ohio, Connecticut, Massachusetts, Alabama and Indiana.