Medtronic, Inc. (NYSE:MDT) announced it will purchase the outstanding stake in CathWorks for as much as $585 million, with the possibility of additional, undisclosed earn-out payments tied to the acquisition. The company, which has a market capitalization of $132.7 billion, continues to deploy its balance sheet to expand into higher-growth areas within medical technology.
Data from InvestingPro indicates Medtronic has been profitable in the last twelve months, generating $34.76 billion in revenue over that period. Leerink Partners responded to the CathWorks deal by reiterating an Outperform rating and maintaining a $120 price target on Medtronic shares, viewing the move as an "incremental positive" that aligns with management’s strategy of selectively investing in growth opportunities.
Deal mechanics and timing
Medtronic said the transaction is expected to be completed by the end of fiscal year 2026. Company management characterized the acquisition as immaterial to fiscal 2027 GAAP and adjusted earnings per share, projecting it will be neutral-to-accretive to earnings after that period.
The acquisition follows a strategic partnership formed in 2022 between Medtronic and CathWorks, which included a co-promotion agreement for the CathWorks FFRangio System across the U.S., Europe and Japan. The current transaction builds on that earlier commercial relationship and comes after Medtronic’s recent investment in Anteris.
Technology and product positioning
CathWorks offers an alternative to traditional wire-based fractional flow reserve techniques used to diagnose coronary artery disease. The company’s approach uses artificial intelligence and computational science to produce a physiological assessment of the coronary tree directly from routine angiograms, eliminating the need for invasive pressure wires in the diagnostic workflow.
For Medtronic, the acquisition extends its exposure to software-driven diagnostic capabilities that can sit on top of existing imaging workflows. Leerink’s maintained price target, which sits about 16% above the then-current trading price of $103.46, reflects the view that adding CathWorks is a strategic complement rather than a transformational purchase.
Other recent product and regulatory developments
- Medtronic has widened access to its MiniMed 780G automated insulin delivery system via Medicare coverage and received FDA clearance for use with ultra rapid-acting insulins, and approval for the system to work with Abbott’s Instinct sensor for people with insulin-requiring type 2 diabetes.
- The Affera Sphere-360 catheter, targeted at treating paroxysmal atrial fibrillation, received CE Mark approval in Europe and has completed initial cases in the U.S. Horizon 360 IDE pivotal trial.
Market context cited alongside the deal includes analyst commentary forecasting a rebound in the U.S. med-tech sector by 2026 and notes of potential merger and acquisition activity in the medical device industry.
Market and stock context
At the time of Leerink’s note, Medtronic was trading near its 52-week high and typically shows low price volatility, with a beta of 0.72 reported by InvestingPro. The $120 price target corresponds to roughly 16% upside from the quoted $103.46 share price.
The acquisition is presented by management as a targeted, strategic step to broaden Medtronic’s foothold in AI-enabled diagnostic tools while preserving near-term earnings stability.