Boston Scientific Buys EndoChoice for $210M, Expands GI Business
Boston Scientific has announced a $210 million deal to acquire EndoChoice Holdings, an Atlanta-based medtech specializing in endoscopic imaging systems, single-use devices, and infection control products. Senior leadership for Boston Scientific said that the acquisition would “build leadership” for the company in the endoscopy market.
EndoChoice was founded in 2008, following the merger of a U.S. marketing company and an Israeli tech firm, according to Globes. The company’s core product is its Full Spectrum Endoscope (FUSE), which offers a 330-degree field of vision for greater visibility in the small intestine. Last year, the company launched a second-generation FUSE, the first flexible endoscopy system to offer 4K Ultra HD monitors.
Along with FUSE, Boston Scientific also is picking up EndoChoice’s portfolio of single-use devices, such as resection and retrieval devices, needles, infection control kids, and pathology services. EndoChoice reported $75 million in profits last year, and sales of FUSE grew over 100 percent. An IPO launched in 2015 raised $96 million, reported Globes.
“The addition of EndoChoice products and services to our portfolio supports our strategy to provide comprehensive solutions to gastroenterology (GI) caregivers and patients they serve,” said Art Butcher, senior VP, Boston Scientific, endoscopy, in a press release. “We expect the acquisition to expand our leadership into new categories in the endoscopy market, and to drive strong, continued growth of our endoscopy business.”
Boston Scientific’s existing gastroenterology portfolio includes lines of balloon dilation catheters, single-use devices, and surgical tools, as well as the SpyGlass Direct Visualization System, used for cholangiopancreatoscopy.
Mike Gilreath, founder and CEO of EndoChoice, commented that his company’s “broad portfolio” of products and services dovetailed nicely with the complementary products, global infrastructure, and reach of Boston Scientific. “The combination creates an enhanced growth platform for both businesses, and delivers immediate value for our shareholders,” said Gilreath.
In July, Boston Scientific reported an impressive 27 percent growth in net income for its second quarter of 2016, credited to CEO Mike Mahoney’s strategy of diversifying into unsaturated markets to offset revenue slow-downs in some of the company’s core product offerings, principally cardiac rhythm management. Since the FDA’s approval of Boston Scientific’s MRI-compatible pacing products, that segment has gained momentum.
Last year, Boston Scientific picked up Xlumena, a manufacturer of minimally invasive devices for endoscopic ultrasound. In April, the acquisition of Cosman Medical and its portfolio of radiofrequency ablation systems expanded the company’s product offerings in neuromodulation. When asked about future M&A strategy, Mahoney recently remarked that he wants to build “financial flexibility.”