Medical solutions company Boston Scientific Corporation (BSX) has announced that it will exercise its option to acquire the remaining 73% stake in medical technology company Farapulse for $295 million. The transaction is likely to close in the third quarter of 2021.
Following the news, shares of the company declined marginally on Thursday. However, they recovered slightly to close at $43.90 in the extended trading session.
Boston Scientific made its first investment in Farapulse in 2014 and acquired a 27% stake in the company. The $295 million investment for the remaining 73% stake will include a $92 million payment upon completion of some clinical, revenue-based, and regulatory targets.
On an adjusted basis, Boston Scientific believes the purchase to be slightly dilutive to its EPS in 2021 and 2022. The company expects to negate the dilution with some cost-cutting measures.
Senior Vice-President and Chief Medical Officer of Rhythm Management and Global Health Policy at Boston Scientific, Kenneth Stein, said, “The FARAPULSE PFA System is intended to enable physicians to precisely ablate cardiac tissue while minimizing procedural complications, and real-world and clinical evidence from trials throughout Europe have demonstrated encouraging, positive results.” (See Boston Scientific stock chart on TipRanks)
Recently, BTIG analyst Marie Thibault reiterated a Buy rating on the stock with a price target of $48 (9.8% upside potential).
Consensus among analysts is a Strong Buy based on 15 Buys and 4 Holds. The average Boston Scientific analyst price target of $49.56 implies upside potential of 13.4% from current levels. Shares of the company have gained 29% over the past year.
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