Well it seems as though the rumors we have heard about Medtronic selling their diabetes franchise to a private equity group are true. While the terms of the transaction are still not final and as with all deals until the ink is dry nothing is set in concrete. Here is what we know so far:
1. Aloha Capital Management is the lead private equity group. We endeavored to reach out to Aloha as quite honestly no one we reached out to knew much about them.
2. The purchase price is a whopping $6 Billion although we aren’t certain if Medtronic gets the whole $6 Billion upfront or if there is an earn-out.
3. Medtronic has agreed to indemnify Aloha from any harm resulting from the ongoing FDA investigation. From what we understand if anything goes wrong Medtronic will write Aloha a check.
4. Based on our initial discussions with other private equity groups some of whom who claim to know Aloha the group will not hesitate to reach out to Dexcom once the deal is complete. We did reach out to Dexcom who would not comment.
5. These same groups were a little less clear whether Aloha will work with the we aren’t waiting community.
Before we go on here lets be very clear that this deal is NOT set in stone just yet and could fall apart at any moment. However it does solve a huge problem for Medtronic and unlike JNJ they will actually get something before the franchise loses all its value. Our sources inside Medtronic, some of whom who are involved in the transaction, noted that the company is anxious to get this deal concluded as they are worried the FDA could levy tough restrictions on the company as a result of the ongoing investigation.
Our sources inside the FDA could not be reached for comment and we suspect even off the record they would not say much.
Our goal for the moment is to get in touch with anyone from Aloha who given the name we suspect is located somewhere in Hawaii. Which is very convenient since we also happen to be in Hawaii, imagine that. Now we are schedule to leave this paradise later this week but are willing to sacrifice the airline change fee and pay for the extra hotel nights if Aloha wants to have a face to face. We have communicated this message to the other private equity groups in the hopes they can reach Aloha and have them get in touch with us here on the Big Island.
Listen we don’t want to brag or anything but what other resource but Diabetic Investor would make such a huge sacrifice to get the whole story. Yes we will tough out here in beautiful Hawaii as long as it takes to get this story right. This is how determined we are, this is how dedicated we are, this is after all April Fools Day.