Medtronic is acquiring EOFlow for its EOPatch device. This is an insulin delivery device that is tubeless, wearable, and fully disposable. The company intends to combine this with its Meal Detection Technology algorithm and continuous glucose monitor.
With these companies combined, Medtronic believes its ability to provide simple and effective diabetes management will increase. EOPatch is already approved for use in Europe, South Korea, Indonesia, and the United Arab Emirates.
MDT Transaction Details
Medtronic will acquire EOFlow via an offering for the company’s stock. This has it signing a purchase agreement with EOFlow’s leaders, as well as planning to purchase all public shares of the stock. This has it expecting to spend $738 million on the deal.
Medtronic will need to complete customary closing conditions before the deal is complete. Both companies expect the acquisition agreement to close in the second half of 2023. Medtronic estimates that the acquisition to be 1% dilutive to earnings per share for the three years after its completion. It should be neutral to accretive after that.
MDT stock is down 5.3% as of Thursday morning.
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On the date of publication, William White did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.