Stryker Corporation has announced the closing of its acquisition of the assets of the Neurovascular division of Boston Scientific which includes products used for the minimally invasive treatment of haemorrhagic and ischaemic stroke.
Boston Scientific has issued a release stating that the sale price is $1.5 billion, of which $1.45 billion was received at closing (including an upfront payment of $1.376 billion, a $50 million milestone payment associated with the commercialisation of the next-generation Target Detachable Coils, and $24 million which will be placed into escrow to be released upon the completion of local closings in certain foreign jurisdictions). The remaining $50 million will be payable upon the transfer or separation of certain manufacturing facilities. The sale follows the definitive agreement announced on October 28, 2010.
“With the acquisition of Boston Scientific Neurovascular we are further broadening our footprint in one of the fastest growing and innovative segments of the medical technology market,” said Stephen P MacMillan, chairman, president and chief executive officer of Stryker. “We look forward to the ongoing introduction on next generation neurovascular devices that will improve outcomes for patients and help drive accelerating sales growth.”
Boston Scientific announced that on December 31, 2010 it prepaid all $600 million of its 6% senior notes due June 15, 2011, using cash on hand. It plans to record a pre-tax charge, not included in previous guidance, of approximately $15 million (approximately $9 million after tax, or $0.01 per share) in the fourth quarter of 2010 representing accelerated interest expense associated with the prepayment.
The transaction is expected to be break even to slightly accretive to Stryker’s 2011 earnings per share excluding acquisition and integration-related charges.