Boston Scientific to Sell Neurovascular Unit to Stryker for $1.5B
Natick, MA-based Boston Scienfic is getting out of the neurovascular business. The medical devices giant (NYSE:BSX) said today it has agreed to sell the business to Kalamazoo, MI-based Stryker (NYSE:SYK) for $1.5 billion in cash. The deal is expected to close before the end of the year, according to the companies.
Boston Scientific said it plans to use about half of the $1.2 billion in after-tax proceeds of the sale for acquisitions and the remainder for retiring debt. Stryker has agreed to pay Boston Scientific $1.4 billion for the business at the closing of the deal and the remaining $100 million after the closing based on certain milestones, including the commercial launch of the business’s new Target detachable coils for treating hemorrhagic stroke.
Boston Scientific’s neurovascular business is based in Fremont, CA, and had 2009 revenue of $348 million. The unit employs 1,150 people. The company first acquired the business in 1997 through its purchase of Target Therapeutics. That deal was valued at $1.1 billion.
Stryker said it has tapped Mark Paul, the current president of Boston Scientific’s neurovascular business, to continue to lead the unit after the acquisition closes. The business is a leading provider of medical technologies such as detachable coils, stents, and guidewires used in the treatment of neurovascular diseases.
“The sale of our Neurovascular business is part of our overall strategic plan that will refocus our portfolio to, amongst other criteria, leverage existing sales forces with least invasive, cost and comparatively effective medical devices that reduce or eliminate refractory drug regimens,” said Ray Elliott, Boston Scientific’s president and CEO, in a press release.