Johnson & Johnson exploring sale of Mentor breast implant unit, sources say

26 March 2020

Johnson & Johnson [NYSE:JNJ] is in the early stages of exploring a sale of its Mentor Worldwide breast implant business, according to three sources familiar with the matter.

 

However, the process is likely to be impacted by the current coronavirus outbreak, which is causing a major slowdown in the healthcare deals market, two of the sources said.

 

JNJ is working with JPMorgan on the potential sale process, two of the sources said. The unit generates around USD 100m in EBITDA, all three sources said.

 

Irvine, California-based Mentor is one of the largest makers of breast implants for aesthetic and post-surgical breast reconstruction, according to its website. It makes a line of breast implants under the Mentor brand that are sold in over 100 countries.

 

JNJ announced that it had reached an agreement to take Mentor private in late 2008 for USD 1.1bn, at a 92% premium to the company’s share price at the time. The Mentor division is now part of JNJ’s medical devices division.

 

Mentor competes with Allergan [NYSE:AGN], Sientra [NASDAQ:SIEN], Establishment Labs [NASDAQ:ESTA] and other players in the global breast implant market, according to filings.

 

The global breast implant market was valued at USD 2.7bn in 2019 and is expected to grow at a compound annual growth rate of 6.1% from 2019 to 2030, according to industry tracker Market Industry Reports.

 

The US Food and Drug Administration last March sent warning letters to Mentor and Sientra alleging the companies failed to perform post-approval studies of their silicon gel-filled breast implants to assess long-term safety, according to an FDA press release.

 

Johnson & Johnson in December said it promoted Diane Gomez-Thinnes as Mentor’s worldwide president, succeeding Warren Foust, who was appointed president of JNJ’s Surgical Vision business.

 

Johnson & Johnson did not respond to requests for comment. JPMorgan declined to comment.

 

by Dane Hamilton, Bhavna Kaul and Yiqin Shen