J&J on spree, pays $1.07b for Mentor

NEW YORK - Johnson & Johnson disclosed its second acquisition in a week, drawing on stockpiled cash to buy the breast-implant maker Mentor Corp. for $1.07 billion.

Holders of Mentor will get $31 a share, almost double last week's close, in a deal that pushed the stock within cents of the offer price. Allergan Inc., a maker of implants and the wrinkle treatment Botox, dropped 11 percent on the prospect of competing with J&J, the worlds largest healthcare company.

J&J said last week it would buy Omrix Biopharmaceuticals Inc., a maker of surgical equipment to stanch bleeding, for $438 million. The deals suggest J&J, with more than $14 billion in cash on its balance sheet at the end of September, may be on a shopping spree for undervalued companies, said John Farrall, a healthcare analyst with National City Private Client Group in Cleveland.

"This is right down J&J's alley of a smaller player with decent products that they can just move right through their distribution network," Farrall said yesterday.

Mentor, based in Santa Barbara, Calif., is the world's leading seller of breast implants and also sells equipment used in liposuction and facelifts, all offerings new to Johnson & Johnson. The acquisition would be a "keystone" of J&J's efforts to enter the $4.6 billion market for cosmetic medical products, said Gary Pruden, president of Ethicon, the unit that will oversee Mentor.