Boston Scientific Corporation
) announced its plans to acquire the Interventional Division of
German healthcare major
). The deal, valued at $415 million, is a step toward strengthening
the company's foothold in the global peripheral interventions
market. The acquisition is expected to close in the second half of
For several quarters now, Boston Scientific's worldwide
peripheral business is growing 5% ahead of the market, driven by
the company's huge success with balloons, stents and interventional
oncology. Accordingly, the company is confident of its strategy to
expand this business further. The company is optimistic about the
impending acquisition of Bayer Interventional, which generated
sales of $120 million in the last fiscal.
According to the company, apart from expanding its commercial
footprint, Bayer Interventional will help Boston Scientific to
create a complete portfolio of advanced line of solutions for the
treatment of peripheral vascular disease. The acquisition will also
enable Boston Scientific to access several vital segments in the
peripheral space, including the atherectomy and thrombectomy
Following the closure of the acquisition, Bayer Interventional
will be integrated into Boston Scientific's existing Peripheral
Interventions business under its Cardiovascular unit. For fiscal
2014, the company expects the acquisition to be neutral to its
adjusted earnings per share, while for 2015, it is estimated to be
accretive by a penny. However, acquisition-related charges as well
as amortization will likely have a dilutive impact on 2014 GAAP
earnings while it will have immaterial impact on 2015 earnings.
The peripheral interventions business of Boston Scientific
markets devices used in peripheral vascular stenting and
percutaneous transluminal angioplasty (PTA) procedures. These find
use in the treatment of peripheral diseases (diseases which affect
the blood vessels other than the heart and the biliary tree).
Products include balloon catheters, stents, sheaths, wires and vena
Currently, this business comprises 11.4% of its overall product
portfolio. In the last reported quarter, sales in this segment were
$204 million, up 5.7% year over year (up 5% at CER). Currently, the
company is striving to strengthen its foothold in this business
through innovation and acquisitions.
Boston Scientific plans to launch the drug-coated balloon
platform in certain international markets in the second half of
2014. Also, the international launch of Vessix Renal Denervation
System is expected in the near term. With the impending acquisition
of Bayer Interventional, we expect the company to better overcome
the pricing related challenges in the global peripheral
interventional market. Boston Scientific currently carries a Zacks
Rank #3 (Hold)
Other Stocks to Consider
Some better-ranked medical product stocks that are worth a look
Mead Johnson Nutrition Company
ICU Medical, Inc.
). Both the stocks carry a Zacks Rank #2 (Buy).
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