Pharmaceutical giant Johnson & Johnson (NYSE: JNJ) has announced that it is in advanced negotiations with Dutch biopharmaceutical company Crucell N.V. (NASDAQ: CRXL) to buy all the outstanding shares of Crucell that it does not already own for $2.3 billion in cash. J&J owns about 18% of the Dutch firm, and its offer amounts to about $32.31/share for the remaining 82%.
This isn’t the first time that Crucell has been targeted for acquisition. Last year Wyeth was in friendly negotiations for the firm, but those were cut off when Pfizer, Inc. (NYSE: PFE) initiated its takeover of Wyeth.
Crucell develops and manufactures vaccines to combat infectious diseases such as hepatitis, influenza, typhoid, and cholera. Most of Crucell’s vaccines are sold to the developing world and the company supplies substantial amounts of its vaccines to Unicef.
For J&J, the deal gives the company a firm foothold in the vaccine market, an area where it has not developed its own presence. The acquisition give J&J additional potential to develop vaccines and, perhaps more important, to use the company’s vast marketing machine to sell the vaccines.
J&J’s offer for Crucell values the Dutch firm at about 57 times 2010 estimated earnings, a premium to recent biotech deals that valued the acquired company at an average of 36 times earnings, according to Bloomberg. Crucell shareholders, who must approve the offer once it is made formally, would be crazy to turn this deal down.
Unless, of course, Crucell gets a better offer. That doesn’t appear likely according to one analyst who notes that the diverse base of shareholders would have trouble reaching agreement on where to search for a higher bid.
Crucell’s shares have jumped more than 55%, to $31.90 in early trading this morning, on about seven times normal volume.
As of this writing, Paul Ausick did not own a position in any of the stocks named here.
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