Blog Coverage Boston Scientific Announces Acquisition of EndoChoice in a Strategic Endoscopic Merger

LONDON, UK / ACCESSWIRE / September 28, 2016 / Active Wall St. blog coverage looks at the headline from Boston Scientific Corporation (NYSE: BSX) and EndoChoice Holdings, Inc. (NYSE: GI). Both companies Boston Scientific (“BSC”) announced on September 27, 2016, that it has entered into a definitive agreement to acquire EndoChoice Holdings. Executives from BSC stated that it would pay $8 per share in cash for EndoChoice, a premium over its closing price of $4.22 per share on September 26. Register with us now for your free membership and blog access at: http://www.activewallst.com/register/.

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A step towards diversification

BSC has aimed at diversifying its portfolio in the recent years. The endoscopy device unit, of which EndoChoice will be a part, sales rose 11% to $361 million in the June quarter, according to a Wall Street Journal report.

It is good to note that EndoChoice generated approximately $75 million of total sales in the 12-month period concluding on June 30, 2016. EndoChoice provides solutions, services, and innovative products for a wide range of gastrointestinal conditions. The global market of endoscopy devices is one of the fastest growing sectors in the medical device industry, and is estimated to fetch about $75.8 billion by 2022, according to a visiongain report.

Boston Scientific Strengthens ist Endoscopy Department with Acquisition

BSC, primarily known for the development of Taxus Stent, a drug-eluting stent, used to open clogged arteries, has executed several mergers in the recent past to establish itself as a world leader. Its acquisition of the American Medical Systems, a provider of devices to treat enlarged oriostrate, urinary incontinence, and erectile dysfunction, which saw the deal closed on August 4, 2016. The deal was finalised at $1.6 billion plus a potential $50-million milestone payment on set revenue goals for 2016. BSC further strengthened its stance in the endoscopic ultrasound device sector on April 1, 2015, with the acquisition of Xlumena Inc., the producer of the world’s first stent for endoscopic ultrasound-guided transluminal drainage of symptomatic pancreatic pseudocysts. The deal was closed at $65.5 million, and an additional $12.5 million in milestone payments on set revenue goals through 2018.

Breaking down the merger

The Boston Scientific/EndoChoice merger is significant for both entities as stated by the executives.

“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,” said Art Butcher, senior vice president and president, Boston Scientific (endoscopy), in the official press release.

Under the terms of the agreement, BSC will raise a tender offer for all Endochoice’s outstanding shares at a cash price of $8.00 per share. The same price would be in consideration for the remaining shares which participated in the tender offer, according to the official press release. The deal, is expected to close in the fourth quarter of 2016, subject to customary closing conditions. The transaction is expected to be less accretive on a GAAP basis, due to amortization expense and transaction and integration costs in 2017.

Stock Performance

At the closing bell, on Tuesday, September 27, 2016, Boston Scientific’s stock slightly slipped 0.04%, ending the trading session at $23.72. A total volume of 12.32 million shares were traded at the end of the day, which was higher than the 3-month average volume of 8.35 million shares. In the last three months and previous six months, shares of the company have advanced 6.13% and 26.04%, respectively. Moreover, the stock surged 28.63% since the start of the year.

On Tuesday, Endochoice’s stock price almost doubled as it surged 88.39% above its previous closing price of $4.22 to end the trading session at $7.95, close to its acquisition price. A total volume of 7.47 million shares have exchanged hands, which was higher than the 3-month average volume of 57.36 thousand shares. EndoChoice Holdings’ stock price advanced 110.32% in the last month.

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