In keeping with its strategy of value-added acquisitions, Boston Scientific Corp. BSX recently completed the acquisition of American Medical Systems (AMS) Men's Health and Prostate Health businesses of global specialty healthcare company, Endo International plc ENDP, to expand in men's urology solutions.
Boston Scientific has shelled out a total of $1.65 billion for this acquisition, with $1.6 billion in cash payable at closing (expected in the third quarter of 2015) and a potential additional $50 million payment milestone based on 2016 sales from this business.
The acquired men's urology business, which will be a part of Boston Scientific Urology and Women's Health, is expected to strengthen Boston Scientific's leadership in the urology device category globally, while also providing incremental shareholders’ return.
Notably, the AMS Men's Health and Prostate Health businesses have generated $400 million in sales and $130 million in adjusted operating income in 2014. The impending acquisition will include the AMS product portfolio for treating urologic conditions, including benign prostatic hyperplasia (BPH), male stress urinary incontinence and erectile dysfunction. These solutions will duly complement Boston Scientific's kidney stone, pelvic organ prolapse, female stress urinary incontinence and abnormal uterine bleeding treatment portfolios.
The combined portfolio will provide comprehensive urology, urogynecology and gynecologic surgery solutions. Post-acquisition, the company projects this portfolio to create nearly $1 billion in annual sales with significant synergies and strong growth prospects through portfolio innovation and international market expansion.
The Urology and Women’s Health business at Boston Scientific, comprising almost 7% of the company’s total revenues, continues to outperform the market. The segment grew an impressive 9% in the last reported quarter, driven by double-digit growth in the urology franchise and strong international sales growth.
We expect Boston Scientific’s recent endeavors to lend further competitive edge in the fast-growing Urology market. Currently, the company is striving to strengthen its foothold in this business through innovation and acquisitions.
The stock currently carries a Zacks Rank #3 (Hold). Med-Products stocks like Abaxis, Inc. ABAX and Hospira Inc. HSP are expected to do well. Both the stocks sport a Zacks Rank #1 (Strong Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Be the first to comment