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Boston Scientific to acquire EndoChoice, expand GI portfolio
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Boston Scientific has entered an acquisition agreement with the medtech company EndoChoice Holdings, which will become part of Boston Scientific’s endoscopy business, the companies announced.
EndoChoice develops and commercializes gastroenterology products and services, including single-use devices like resection and retrieval devices, needles, graspers and infection control kits, as well as pathology services and imaging technologies. Its portfolio includes the Full Spectrum Endoscopy (FUSE) colonoscope, which Boston Scientific intends to restrategize, according to a press release. The company generated around $75 million in sales between the end of June 2015 and the end of June 2016.
“The addition of EndoChoice products and services to our portfolio supports our strategy to provide comprehensive solutions to gastroenterology caregivers and the patients they serve,” Art Butcher, senior vice president and president of Boston Scientific, endoscopy, said in the press release. “We expect the acquisition to expand our leadership into new categories in the endoscopy market, and to drive strong, continued growth of our endoscopy business.”
Boston Scientific has agreed to initiate a tender offer of $8.00 cash per share for all of EndoChoice’s outstanding shares, and if successful, remaining shares will be given the same consideration as those purchased by stockholders in the tender offer, according to a press release. The equity value is about $210 million and the transaction is expected to close in the fourth quarter of this year, contingent on customary closing conditions.
“The acquisition is expected to be breakeven to Boston Scientific adjusted earnings per share in 2017, and accretive thereafter. The transaction is expected to be less accretive (or dilutive, as the case may be) on a GAAP basis, due to amortization expense and transaction and integration costs,” according to the press release.
“The combination of our broad portfolio of products and services for the gastroenterology physician, with the complementary products and large global infrastructure of the Boston Scientific endoscopy business, creates an enhanced growth platform for both businesses, and delivers immediate value for our shareholders,” Mark Gilreath, founder and CEO of EndoChoice, said in the press release.
Disclosures: Butcher is employed by Boston Scientific. Gilreath is employed by EndoChoice.