Boston Scientific May Buy Endo's Medical Device Business For $2B
By Jof Enriquez,
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Boston Scientific is reportedly close to acquiring the AMS (American Medical Systems) medical device business of Endo Pharmaceuticals.
Citing unnamed sources privy to the matter, Reuters reports that Boston Scientific could pay as much as $2 billion for the AMS unit. If acquisition talks continue to progress, then a deal may be announced “within a matter of weeks.” However, talks could still break down.
Representatives from both companies have declined to publicly comment on the reported talks.
A deal would be the first big purchase for Boston Scientific in nearly 10 years, Reuters noted. Its last major acquisition was its takeover of Guidant in 2006 for $27 billion, a transaction that has left Boston Scientific mired in debt.
Since then, Boston Scientific has largely sat idle while other large medical device manufacturers have been busy with mergers and acquisitions. Last year, for instance, Zimmer bought Biomet for $13.4 billion, and Medtronic recently closed its merger with Covidien in a deal valued at $42.9 billion.
The recent spate of consolidation among industry rivals, along with the resolution of its long-standing dispute with Johnson & Johnson over the Guidant deal, could be pushing Boston Scientific to make a relevant acquisition soon to keep up with rivals.
The settlement with J&J could finally allow Boston Scientific move on from the oft-criticized Guidant acquisition. J.P. Morgan said in a note recently that the lawsuit’s resolution should “clear the way for increased capital deployment and/or acquisitions in the back half of the year,” according to a Wall Street Journal article.
Boston Scientific may have found the right acquisition target at the right time. Last year, Endo had reportedly put up AMS for sale, three years after acquiring it for $2.9 billion. The company also paid $830 million to settle 20,000 claims over faulty transvaginal implants made by AMS.
Endo had previously made known its plans to concentrate on its pharmaceutical business and divest non-related businesses.