St. Jude buy shows strength of market

Summary:Heart care remains a large and growing business, despite health reform, and innovators are continuing to benefit.

When you spend $1.3 billion on an acquisition and your stock price goes up, you are in a hot market.

So it is with St. Jude Medical.

The company best known for pacemakers put that much money into AGA Medical, which makes a line of products dubbed AMPLATZER which aim to allow more heart procedures to be done using catheters, as opposed to opening up the chest.

About $1 billion is going to buy the stock, the rest is going to assume debt, and St. Jude is assuring its stock price stays high with a stock buy-back timed to coincide with the deal.

(The picture of an AMPLATZER occluder at the right comes from the FDA.)

The product line name comes from co-founder Dr. Kurt Amplatz, who is now retired and a philanthropist. The other co-founder, Franck Gougeon, can now join him in philanthropy.

For those who follow corporate strategies, this follows St. Jude's placement of a $375 million price tag on CardioMEMS, a wireless heart implant outfit, and shows the company wants to go well beyond pacemakers, which are a mature technology.

Unlike some deals you may read about, where an offer is just an offer, this looks like a done deal. AGA is privately held, and both its founder and private investors have approved the deal.

Both companies are based in Minnesota so integration should not be a problem.

Along with technology, sales, and a trained team, St. Jude also inherits a legal dispute in this deal. AGA filed a patent suit against competitor W.L. Gore in August. (Yes, Gore is the GORE-TEX company, but they have been in the medical equipment area for some time.)

The bottom line is that heart care remains a large and growing business, despite health reform, and innovators are continuing to benefit.

This post was originally published on

Topics: Innovation


Dana Blankenhorn has been a business journalist since 1978, and has covered technology since 1982. He launched the Interactive Age Daily, the first daily coverage of the Internet to launch with a magazine, in September 1994.

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