What happened
Shares of Cardiovascular Systems (NASDAQ: CSII) are up big today. Specifically, the medical technology company's stock is up by a noteworthy 48.7% as of 10:44 a.m. ET Thursday morning.
Cardiovascular Systems' stock is jumping in response to a buyout agreement with Abbott Laboratories (NYSE: ABT). Per the terms of the deal, Abbott has agreed to pay $20 per share for Cardiovascular Systems for a total deal value of approximately $890 million.
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So what
This price point represents a 50% premium relative to where Cardiovascular Systems stock closed Wednesday. What's more, Abbott expects the deal to be neutral to its 2023 ongoing earnings per share guidance.
Through this acquisition, Abbott will gain Cardiovascular Systems' platform of market-leading vascular plaque clearing devices. Wall Street analysts expect this novel platform to generate roughly $284 million in sales in 2024.
To put this sales figure into context, Abbott is forecast to haul in over $42 billion in sales next year. So this acquisition probably won't have much of an impact on the healthcare giant's financials in the near term. In fact, the real value add behind this deal appears to be Cardiovascular Systems' early-stage pipeline of complementary vascular intervention devices.
Now what
Is Abbott stock a buy on this news? Although this particular transaction won't have an immediate impact on Abbott's core value proposition, this Dividend King is arguably always worth consideration. Speaking to this point, Abbott has raised its dividend for 51 consecutive years, it sports a rock-solid balance sheet, and it offers respectable top-line-growth prospects over the balance of the decade.
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George Budwell has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Abbott Laboratories. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
