Asahi Kasei Corp., a Japanese chemical manufacturer, agreed to acquire Massachusetts-based medical device and software maker Zoll Medical Corp. for about $2.21 billion, to expand its global presence and develop a leading position in critical care.
In the medical devices business, the U.S. market leads the world, not only in size and scope, but also in technological innovation, so establishing a strong infrastructure in the U.S. is an important step for Asahi Kasei, Asahi Kasei President Taketsugu Fujiwara said Monday in a statement.
Healthcare makes up 7 percent of the company's sales; however, Asahi Kasei has identified critical care as a strategic growth area. The company derives more than half of its sales from its chemicals and fibers businesses and nearly one-third from home and construction materials.
Under the deal announced Monday, Asahi Kasei is offering $93 a share for each Zoll share, a 23.8 percent premium over Zoll's closing price of $75.10 on Friday. After the deal is completed, Zoll will be delisted from the Nasdaq Stock Exchange.
Zoll makes resuscitation and critical care devices and related software solutions. Asahi Kasei expects Zoll's product lines, including LifeVest, the world's only wearable automatic defibrillator, would drive growth.
Japanese companies have stepped up their overseas acquisition activity in recent years in the face of a shrinking domestic market.
Asahi Kasei said last year it would invest about 1 trillion yen ($12.2 billion) over the next five business years, including money spent on mergers and acquisitions.
Monday's deal is the third largest in value by a Japanese company so far this year, according to Dealogic. It's also the ninth-largest acquisition-merger deal in the health care sector on record for a Japanese company acquiring overseas assets.
Zoll's shares, hit a record high of $76.22 last month and so far this year have gained nearly 20 percent in value. In January, the company reported first-quarter earnings of 29 cents a share, topping analysts' expectation by 3 cents.
Shares of Zoll (NASDAQ: ZOLL) rose $17.63, or 23.5 percent, to $92.73 in morning trading, while shares of Asahi Kasei (TYO: 3407) rose 0.2 percent to close at 518 yen in Tokyo.