Japan's Asahi Kasei Corp. has agreed to buy Zoll Medical Corp, a maker of Lifevest defibrillators and other critical care medical devices, for about $2.2 billion in an effort to sharpen its focus in the health care business.
Asahi Kasei is a major Japanese chemical manufacturer with a variety of businesses including health care, construction materials and electronics. It said Zoll's leading position in resuscitation technologies was particularly attractive as it seeks to bolster its health care operations with an added emphasis on critical care.
Taketsugu Fujiwara, Asahi Kasei president and representative director, said Zoll will form the cornerstone of Asahi's critical care business.
"Together we will pursue new opportunities in the high-growth markets of Asia," Fujiwara said in a statement.
Under the deal announced Monday, Asahi is offering $93 per share for each Zoll share, a 24 percent premium over Zoll's closing price of $75.10 on Friday.
Zoll shares jumped $17.84, or 24 percent, to close at $92.94 after reaching a new high of $93.01 earlier in the session.
Zoll makes LifeVest, a wearable defibrillator that detects life-threatening heart rhythms and delivers electric shocks to correct them. The device is worn by patients who are at risk for sudden cardiac arrest, including those who have had a heart attack or are waiting for or recovering from bypass surgery or stent replacement. Sales of LifeVest totaled $111 million in the company's latest fiscal year.
Zoll had $523.7 million in revenue in its latest fiscal year and expects about $613 million to $623 million in revenue in the current fiscal year.
The plan is that after the deal is completed, Zoll will become a subsidiary of Asahi's global operation while maintaining its current management team, business units and operations.
A tender offer, which has been approved by boards of directors for both companies, is expected to begin within 10 business days. It must win approval by regulators and two-thirds of Zoll Medical's outstanding shares.
The deal is expected to close before the end of June, the companies said.
Zoll shares have traded between $33.84 and $76 over the last year. The stock plunged in August on concerns that Medicare may limit its payments for devices like LifeVest, and recovered in December after Medicare confirmed it plans to cover the device.