Boston Scientific Corporation (BSX), the manufacturer of medical devices used in interventional medical specialties, announced that it has signed a deal to snap up Baylis Medical Company Inc. for $1.75 billion.
Through this acquisition, new left heart access platforms will be added to Boston Scientific’s electrophysiology and structural heart portfolios. These platforms (VersaCross and NRG) are expected to enhance the safety, efficacy and efficiency of therapies in the left side of the heart. For 2022, Baylis Medical is expected to generate net sales of $200 million.
The transaction, which is subject to certain customary closing conditions, is likely to conclude in the first quarter of 2022.
Boston Scientific expects the deal to be around one cent accretive to adjusted EPS in 2022 and at an improving figure thereafter. On a GAAP basis, it is expected to be less accretive or dilutive in 2022 and less dilutive or increasingly accretive thereafter due to amortization expense and acquisition-related net charges, the company said.
Following the announcement of the deal, Boston Scientific CEO Mike Mahoney said, “The talented and innovative Baylis Medical Company team, combined with these transseptal platforms, will enhance our efforts to improve procedural efficiencies with physician tools designed to make left atrial access safer and more predictable, with a focus on patient outcomes.” (See Boston Scientific stock charts on TipRanks)
Following the deal, Needham analyst Michael Matson reiterated a Hold rating on the stock but did not assign any price target.
Matson believes that “the Baylis Medical acquisition could help BSX to stem its EP market share losses and potentially regain some share in 2022 and beyond.”
Consensus among analysts is a Strong Buy based on 14 Buys versus 4 Holds. The average Boston Scientific price target of $60.53 implies 41.2% upside potential from current levels. Shares have gained 6.7% over the past year.
Additionally, Boston Scientific scores an 8 out of 10 from TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.
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