BSX to Take Over Bard EP Division - Analyst Blog

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Recently, Boston ScientificCorporation ( BSX ) announced its plans to acquire Bard EP, the electrophysiology business of C.R. Bard ( BCR ). The deal, valued at $275 million, is a step toward strengthening the company's foothold in the $2.5 billion global electrophysiology market. The acquisition is expected to close in the second half of 2013.

With the market growing at a rapid pace of 10% a year, Boston Scientific is confident about the strategy to expand its electrophysiology business. The company is optimistic about the impending acquisition of Bard EP, which generated sales of $111 million in the last fiscal. According to the company, Bard EP will provide Boston Scientific an extensive line of solutions for cardiac catheter ablations and other EP tools for the detection and treatment of abnormal heart beats.

Following the closure of the acquisition, Bard EP will be integrated into Boston Scientific's existing electrophysiology business under its Rhythm Management unit. For fiscal 2013, the company expects the acquisition to be neutral to its adjusted earnings per share, while for 2014, it is expected to be accretive by a penny. However, for both fiscals, acquisition-related charges as well as amortization will have a dilutive impact on GAAP earnings.

Currently, Boston Scientific's electrophysiology business comprises only 2% of its overall product portfolio. In the last fiscal, the global net sales of Electrophysiology products were $147 million, while the U.S. net sales were $108 million. Currently, the company is striving to strengthen its foothold in this business through innovation and acquisitions.

In 2012, it received Health Canada and CE Mark approval for its Blazer Open-Irrigated Catheter. This latest radiofrequency ablation (RFA) catheter is designed to treat a variety of arrhythmias such as atrial fibrillation, atrial flutter, ventricular tachycardia and other supraventricular tachycardias.

Additionally, on Oct 9, 2012, Boston Scientific acquired Rhythmia Medical, Inc., a developer of next-generation mapping and navigation solutions for use in cardiac catheter ablations and other electrophysiology procedures, including atrial fibrillation and atrial flutter. Boston Scientific expects to receive CE Mark approval for the Rhythmia technology in the second quarter of 2013 and FDA approval in the second half of 2013.

We are optimistic about Boston Scientific's recent endeavors and expect these to create a competitive edge for the company in the fast-growing electrophysiology market. This strategy is significant given the poor performance of its core segments of stents and defibrillators.

The stock currently carries a Zacks Rank #3 (Hold). Other stocks like Natus Medical ( BABY ) and Haemonetics Corporation ( HAE ), which carry a Zacks Rank #1 (Strong Buy), are expected to do well.



NATUS MEDICAL (BABY): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: BABY , BCR , BSX , HAE

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