Medtronic acquires insulin patch pump maker EOFlow for $738M amid new MiniMed rollout

Though the smallest of Medtronic’s four core businesses, the diabetes department has taken center stage as of late.

Fresh off reaching a resolution with the FDA over a warning letter concerning its diabetes business headquarters in California—which in turn came just as the agency finally handed down the long-awaited clearance of Medtronic’s latest MiniMed insulin pump—the company has inked a deal to further expand the portfolio.

Medtronic is set to acquire EOFlow, the South Korea-based maker of an insulin patch pump. In its announcement of the deal Thursday, Medtronic suggested that integrating the tubeless device with its own continuous glucose monitors and meal-detection algorithm—both of which can also be used alongside the MiniMed pumps—could create a new closed-loop system for largely hands-off diabetes management.

EOFlow’s wearable pump is waterproof and fully disposable and can hold up to 3.5 days’ worth of insulin. It delivers both basal and bolus doses of the medication as needed and is designed to connect wirelessly to a user’s smartphone to make managing those dosages easier.

To date, the EOPatch is only authorized for use in South Korea, Europe, Indonesia and the United Arab Emirates; Medtronic said it plans to begin integrating the patch pump into its own diabetes tech and securing other necessary regulatory approvals immediately after the deal closes.

The acquisition deal will see Medtronic snap up all outstanding shares of EOFlow and delist the company so it can be folded into the medtech giant’s own diabetes portfolio.

To do so, it’ll offer up 30,000 South Korean won ($22.56) for each of the shares currently held by EOFlow CEO Jesse Kim, President Luis Malave and, in a public tender offer, all other outstanding public shares. It also plans to ink a share subscription agreement with the tech maker, under which Medtronic will offer 24,359 won ($18.31) to buy new shares, the proceeds of which will help fund the R&D and other business operations of EOFlow. Once all of those transactions are complete, Medtronic is aiming to hold “at least a majority of the shares outstanding.”

In total, Medtronic is offering up to 971 billion won, or about $738 million, for the acquisition.

The deal is expected to close in the second half of 2023, as long as Medtronic can acquire the minimum number of shares it’s after and snag the regulatory clearances it’ll need to bring EOFlow’s tech under the Medtronic umbrella.

The M&A news came as Medtronic also released an earnings report summing up its fiscal year 2023, which ended April 28. Altogether, the company took in more than $31.2 billion for the year. Though that represents a year-over-year decrease of 1.4% on an as-reported basis, it’s an improvement of 2.1% over 2022’s haul on an organic basis, which excludes both the negative impacts of fluctuating foreign currency exchange rates and the decidedly more positive effects of a handful of acquisitions and divestments.

The diabetes business made up nearly $2.3 billion of that total. Though that’s a 3.3% decrease on an as-reported basis, Medtronic expressed optimism in the segment’s future now that the FDA warning letter is no longer looming over its diabetes HQ and now that the MiniMed 780G insulin pump—which generated “low double-digit growth” in Western Europe in the most recent quarter—is set to begin rolling out in the U.S. on June 1.