Johnson & Johnson (J&J) is considering the sale of its stroke care division, Cerenovus, with a potential valuation exceeding $1 billion, as part of its broader efforts to streamline and strengthen its medical technology segment, according to sources familiar with the development.
The New Jersey-based healthcare giant has engaged advisers to gauge interest from private equity firms and strategic buyers in acquiring Cerenovus, a company specializing in surgical equipment for stroke treatment, according to three individuals with knowledge of the situation. Some estimates suggest the sale could range between $1 billion and $1.5 billion. However, sources caution that the auction process may not necessarily lead to a sale, and J&J may ultimately decide to retain the business. The company declined to comment on speculation regarding the potential transaction.
J&J, the world’s second-largest pharmaceutical company with a market capitalization of $375 billion, recorded $31.8 billion in revenue from its medical technology segment last year, contributing to its total revenue of $88.8 billion.
The medtech sector has been a key area of focus for J&J, following major acquisitions in recent years, including the $16.5 billion purchase of heart pump manufacturer Abiomed in late 2022 and the $13.1 billion acquisition of Shockwave Medical, a company specializing in devices for artery treatment, in 2023. J&J also introduced 15 new medical device products last year.
In a significant move last month, J&J announced a $14.6 billion deal to acquire neuroscience drugmaker Intra-Cellular, marking the largest biotech acquisition in over a year. According to analysts at Jefferies, J&J has one of the strongest financial positions in the industry, with substantial cash reserves and borrowing capacity to support its expansion strategy.
Last year, J&J consolidated all its medical device operations under the medtech umbrella, reinforcing its commitment to innovation and efficiency. As part of its corporate restructuring, the company spun off its consumer health division, Kenvue, into an independent publicly traded company, fully divesting its stake in 2023.
