Boston Scientific to sell neurovascular business to Stryker for
9 Nov 2010
Boston Scientific Corporation has announced that it is selling
its neurovascular business to Stryker Corporation for US$1.5
Boston Scientific established its neurovascular business in 1997.
Headquartered in Fremont, California, the business employs
approximately 1,150 people and reported 2009 revenues of US$348
The Neurovascular business develops less-invasive medical
technologies used to treat brain aneurysms and other types of
Boston Scientific will provide transitional services to Stryker
through a transition services agreement, and will also supply
products to Stryker at cost for a period of approximately 24 months
following the closing of the transaction, subject to extension.
Boston Scientific expects to record a gain upon closing the deal in
excess of $500 million, excluding any impact of the receipt of
future milestone payments. Total after-tax proceeds, assuming the
achievement of these milestones, are expected to be approximately
The company's share price has risen from a low of 5.04 at the
beginning of September to 6.79 at close on 8 November, but has still
some way to go to reach its peak of 9.79 in January or even the
5-year peak of over 27 in 2005.
The company says it expects to allocate approximately half of the
net proceeds to acquisitions and the remainder to the retirement of
pre-payable debt. The transaction is expected to close before the
end of the year.
"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, President and Chief
Executive Officer of Boston Scientific.
"The proceeds from this sale will allow us to invest in future
growth opportunities more aligned with that strategy while also
reducing overall debt leverage."