Shockwave Medical acquired by Johnson & Johnson: fairness opinion by Perella Weinberg Partners
Deal terms
Implied value per share by method vs. $335.00 offer
Ranges as disclosed in the banker’s summary of analyses; the red line marks the per-share consideration.
Opinion of Perella Weinberg Partners to the target board
Discounted cash flow assumptions
Present value as of April 3, 2024 of standalone unlevered free cash flows for calendar years 2024-2033 plus terminal value; implied equity value derived by adding cash and subtracting debt and non-operating liabilities, divided by diluted shares using treasury stock method.
Selected public companies (9)
Vericel Corporation · Glaukos Corporation · Inspire Medical Systems, Inc. · Axonics, Inc. · DexCom, Inc. · Insulet Corporation · iRhythm Technologies, Inc. · Inari Medical, Inc. · Penumbra, Inc.
| Multiple | Peer low | Peer median | Peer high | Range applied | Implied per share |
|---|---|---|---|---|---|
| EV / 2024E Revenue | 4.2x | 6.6x | 14.3x | 6.5x–12.5x | $157.00–$296.00 |
| EV / 2025E Revenue | 3.6x | 5.7x | 11.7x | 5.5x–10.5x | $163.00–$306.00 |
Selected precedent transactions (10)
| Date | Target | Acquirer | Multiple |
|---|---|---|---|
| 2024-01-08 | Axonics, Inc. | Boston Scientific Corporation | 9.4x LTM EV/Revenue |
| 2022-11-01 | Abiomed, Inc. | Johnson & Johnson (Parent) | 15.0x LTM EV/Revenue (15.7x inclusive of earnout PV) |
| 2022-01-06 | Vocera Communications, Inc. | Stryker Corporation | 13.3x LTM EV/Revenue |
| 2021-10-06 | Baylis Medical Company, Inc. | Boston Scientific Corporation | — |
| 2021-08-06 | Intersect ENT, Inc. | Medtronic PLC | 10.5x LTM EV/Revenue |
| 2021-01-21 | Preventice Solutions, Inc. | Boston Scientific Corporation | 5.9x LTM EV/Revenue (7.3x inclusive of earnout PV) |
| 2020-12-18 | BioTelemetry, Inc. | Philips Healthcare N.V. | 6.2x LTM EV/Revenue |
| 2019-11-04 | Wright Medical Group N.V. | Stryker Corporation | 5.8x LTM EV/Revenue |
| 2017-09-05 | Neotract Inc. | Teleflex Incorporated | 7.6x LTM EV/Revenue (9.9x inclusive of earnout PV) |
| 2017-06-28 | The Spectranetics Corporation | Philips Healthcare N.V. | 7.7x LTM EV/Revenue |
| Multiple | Low | Median | High | Range applied | Implied per share |
|---|---|---|---|---|---|
| LTM EV / Revenue | 5.8x | 7.7x | 15.0x | 8.5x–15.5x | $163.00–$289.00 |
| NTM EV / Revenue | 5.3x | 7.7x | 13.2x | 7.5x–13.5x | $180.00–$317.00 |
Other analyses
| Analysis | Summary | Implied per share |
|---|---|---|
| Historical Stock Trading (52-week intraday range through Unaffected Share Price Date) | Intraday trading price of Shockwave common stock over the 52 weeks ended March 25, 2024 ranged from $157 to $316 per share; compared to Unaffected Share Price of $287.23, Last Trading Share Price of $320.72 and Merger Consideration of $335.00. Reference information only, not part of the fairness analysis. | $157.00–$316.00 |
| Equity Research Analysts' Price Targets | Reviewed price targets from 11 equity research analysts published prior to the Unaffected Share Price Date, ranging from $165 to $290 per share; updated post-announcement targets ranged from $165 to $361 per share. Reference information only. | $165.00–$290.00 |
$7.0 million payable in cash upon delivery of opinion (or determination it could not deliver the requested opinion); additional fee contingent on consummation of the Merger of approximately $92.7 million (after reduction by the opinion fee). PWP also entitled to a termination fee equal to a portion of any compensation Shockwave receives from termination of the Merger Agreement. PWP received ~$3.4 million from a subsidiary of Parent and ~$5.0 million from Shockwave in the prior two years.
Management projections
| Projection year | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | CAGR |
|---|---|---|---|---|---|---|
| Revenue | $1.3B | $1.7B | $2.0B | $2.4B | $3.0B | 22.3% |
| Revenue growth | 40.7% | 25.2% | 21.7% | 20.1% | 22.3% | |
| EBITDA | $380M | $518M | $694M | $907M | $1.2B | 32.5% |
| EBITDA growth | 69.6% | 36.3% | 34.0% | 30.7% | 29.3% | |
| EBITDA margin | 28% | 31% | 34% | 37% | 39% | |
| Implied EV / EBITDA | 34.5x | 25.3x | 18.9x | 14.4x | 11.2x |
Year-1 growth is against LTM at announcement ($949M revenue, $224M EBITDA); later years are year over year.
Shockwave management prepared the "Company Forecasts," a standalone 2024E-2033E long-range plan (plus a terminal year) approved by the Shockwave Board for PWP's use. Revenue grows from $949 million in 2024E to $5,059 million in 2033E; Adjusted EBITDA from $224 million to $2,359 million; Adjusted EBITA from $213 million to $2,222 million; and unlevered free cash flow from $101 million in 2024E to $1,586 million in 2033E ($1,622 million terminal). PWP used these forecasts in its discounted cash flow analysis, while its comparable company and precedent transaction analyses relied on Wall Street consensus estimates.
Process notes
Other Medical Devices and Supplies fairness opinions
- Silk Road Medical / Boston Scientific 2024
- Surmodics / GTCR 2024 · 36.9x EV/EBITDA
- Atrion / Nordson 2024 · 19.1x EV/EBITDA
- Axonics / Boston Scientific 2024 · 68.0x EV/EBITDA
- Hologic / Blackstone / TPG 2025 · 14.1x EV/EBITDA
- ZimVie / ARCHIMED 2025 · 10.8x EV/EBITDA
All Medical Devices and Supplies opinions → · Perella Weinberg Partners opinions