Johnson & Johnson Buys Biosense For $400 Mln in Shares

The company develops and manufactures products in the area of cardiology that facilitate accurate mapping and diagnosis of internal organs.

Another huge deal has been added to the series of investments by US companies in Israel. This one is the largest of its kind to date. Johnson & Johnson has announced that it is about to take over Biosense, whose development and production centre is in Tirat Hacarmel.

In the acquisition, Biosense’s shareholders will receive a sum estimated at $400 million in Johnson & Johnson shares. Biosense will become part of Cordis, a subsidiary Johnson & Johnson acquired in February 1996, in an offer to the public, for $1.8 billion.

Biosense, which deals in development and production of medical equipment, was set up in 1993 by Professor Shlomo Ben-Haim, a tenured lecturer at the Technion medical school, and a visiting professor at Harvard University. Ben-Haim, who holds 19% of the shares in Biosense, will receive shares worth some $75 million. His brother, Adv. Amit Ben-Haim, who was the first investor in the company, holds 22% of the shares, and will receive Johnson & Johnson shares worth some $88 million.

Another shareholder in the company is the Yozma Fund, formerly a government entity, and now controlled by the Ofer brothers. It holds 1.7% of the shares, worth $7 million. Johnson & Johnson itself holds 14% of the shares in Biosense from previous investments in the company, worth $30 million.

At Biosense, Professor Ben -Haim developed innovative technology that facilitates accurate mapping and diagnosis of internal organs in the human body. The products consist of simple catheters introduced into a person’s body, which become sophisticated catheters which facilitate precise mapping of organs in real time. The products replace existing mapping and diagnostic technologies, such as X-rays and various scanners.

The company’s current products are intended for use in cardiology, hence the natural connection with Cordis, one of the largest companies in the world in the area of cardiology. It deals in products such as balloons and catheterisation systems. Cordis and Johnson & Johnson were previously involved in an attempt to acquire Medinol, which also deals in the development and production of medical products for use in cardiology.

Despite the value at which it is being sold to Johnson & Johnson, Biosense is still considered a company just starting out. Its business record is limited, and its revenue has yet to pass $1 million. Last year, when it sought to raise finance in the US, the company's shareholders' equity amounted to a near $40 million deficit. Most of its products are still at the development or clinical trials stage. The trials are being conducted in conjunction with Cordis itself.

According to Johnson & Johnson’s forecasts, the market for Biosense’s products is likely to reach $2 billion, from which derives, apparently, the sum it was prepared to pay to acquire the company.

Biosense is registered as a US company, but its main activity is in Israel. The company has 85 employees, 60 of them in Israel, and 25 in the US and in Europe.

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