Stryker to buy Bos Sci's neurovascular sector for $1.5B
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| Image source: Brigham and Women's Hospital |
Under the terms of agreement, Boston Scientific will receive $1.4 billion at closing, in addition to up to $100 million upon milestone events for its Target Detachable Coil technology, used to treat hemorrhagic stroke. Additionally, this allocation will include the transfer of manufacturing facilities, which is speculated to take place over a 24-month period.
The Natick, Mass.-based Boston Scientific said that it will provide transitional services to Stryker and products will be sold to the company at a cost that will have a minimal contribution to Boston Scientific's gross profit. These services will be effective for 24 months after the closing of the transaction.
The current transaction will tap Mark Paul, current president of Boston Scientific's neurovascular unit, to head Stryker’s neurovascular business. He will report to Curt Hartman, vice president and chief financial officer of Stryker.
In 2009, Boston Scientific's neurovascular unit reported revenues of close to $348 million. The Kalamazoo, Mich.-based Stryker claimed that the transaction, which is expected to close in the fourth quarter, will break-even to slightly higher than the company’s 2011 earnings per share, excluding acquisition and integration-related charges.