Japanese firm to buy Zoll Medical

Asahi Kasei deal valued at $2.2b; no layoffs planned

Junko Kimura/Bloomberg News
Asahi Kasei Corp. is based in Japan. The company hopes to build its health care business in the United States.

Zoll Medical Corp., a Chelmsford-based maker of resuscitation devices for ambulances and critical-care products used in hospitals, said Monday that it has agreed to be bought by Japanese conglomerate Asahi Kasei Corp., in a deal valued at about $2.2 billion.

The alliance will give Zoll access to the resources of a much larger company to help it expand globally. Asahi Kasei, which sells everything from chemicals to electronics, plans to use Zoll as a platform to build its health care business franchise, especially in the United States.

News that the parties had struck a definitive agreement sent Zoll’s shares soaring $17.94 to $92.94, running up a gain of 23.7 percent on the Nasdaq stock exchange.


Japanese companies have become increasingly active buyers of Massachusetts life sciences businesses in recent years. In the largest deal, Takeda Pharmaceutical Co. snapped up Millennium Pharmaceuticals of Cambridge for $8.8 billion in 2008. Two years later, another Japanese drug maker, Dainippon Sumitomo Pharma Co., paid $2.6 billion for Sepracor Inc. of Marlborough, later changing its name to Sunovion Pharmaceuticals Inc.

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Last month, Dainippon Sumitomo said it would buy a second area company, Boston Biomedical Inc. of Norwood, in a deal with an upfront payment of $200 million, but a potential value of as much as $2.6 billion if the company meets certain milestones.

In a message to employees, Zoll chief executive Richard A. Packer said his company would operate as a wholly owned subsidiary of Asahi Kasei when the deal is completed and Zoll’s current management would remain. The company will keep the Zoll name but also incorporate the buyer’s name. “There will be no restructuring or layoffs and our mission to build the world’s leading resuscitation company remains unchanged,’’ Packer wrote.

Packer declined through a spokeswoman to discuss the 32-year-old company’s plans to align with Asahi Kasei. Zoll has 2,014 employees worldwide, including 780 in the state.

Asahi Kasei gained a foothold in Massachusetts last November, when its pharmaceutical unit acquired five-year-old Artisan Pharma Inc. of Waltham for an undisclosed price. That company is developing a treatment for sepsis, a severe illness in which the bloodstream is infected by bacteria. Asahi Kasei quickly changed the company’s name to AKP America, but it also pledged to hire more than two dozen employees to help develop drugs.


Executives at Tokyo-based Asahi Kasei were not available Monday, said Joshua Goldman-Brown, a US spokesman in New York. He said the company has targeted critical care medical devices as a core area for growth as part of a strategic initiative.

“They’ve been looking for the best partner, and Zoll has a strong business in the United States,’’ said Goldman-Brown. “So that makes this very attractive for Asahi Kasei.’’

Under the deal, the Japanese buyer agreed to pay $93 a share for Zoll, a premium of about 24 percent over the closing stock price Friday.

Some stock analysts complained the purchase deal undervalued Zoll.

“Zoll shares have done well, so this bid is not an attempt to buy a company off a pullback,’’ Sean D. Lavin, analyst for Lazard Capital Markets in Boston, wrote in an investors’ note. Citing Zoll’s growth, he wrote the price “does not fairly account for its long-term value.’’


The company was founded in 1980 by a trio of entrepreneurs, including Dr. Paul M. Zoll, a heart specialist at Boston’s Beth Israel Hospital who is considered a pioneer in the field of defibrillation. The company sells a range of defibrillators, including a vest-like wearable model, as well as catheters, resuscitation pumps, and related equipment.

Its business had been expanding even before it struck the Asahi Kasei deal. Zoll’s sales grew 18 percent to $523.7 million last year, while its net income increased 65 percent to $31.3 million. One analyst suggested that Zoll still could fetch a higher bid.

“Due to Zoll’s unique set of assets, we believe there is a slight chance someone else steps in and makes a superior offer,’’ Jonathan Block, analyst for SunTrust Robinson Humphrey in New York, wrote in a note to investors Monday.

Packer did not address that possibility in his communication with employees.

“While we could not control the timing of this development, nor the partner that came calling, if we are to be part of a larger organization, Asahi Kasei is an almost perfect fit. . .’’ Packer wrote. “No part of Zoll or person in Zoll is redundant to what Asahi Kasei already has. This fact means there will be minimum change or disruption for Zoll.’’

Robert Weisman can be reached at