Boston Scientific Buys Urology Assets Of Endo's AMS For $1.6 Billion

By Jof Enriquez,
Follow me on Twitter @jofenriq

Boston Scientific recently announced the purchase of the urology portfolio of American Medical Systems (AMS), a subsidiary of Endo International.

The deal is valued at least $1.6 billion in cash and includes conditional extra milestone payouts of up to $50 million based on 2016 sales, Bloomberg reports. The transaction will make AMS’s urology assets, which include its men’s health and prostate health businesses, part of Boston Scientific’s urology and women’s health unit.

“We believe this strategic acquisition will strengthen Boston Scientific’s global leadership in the urology device category while delivering a strong return to our investors,” Mike Mahoney, president and CEO of Boston Scientific, said in a recent press release.

The AMS men’s health and prostate health businesses generated sales of approximately $400 million and adjusted operating income of approximately $130 million in 2014.

Boston Scientific plans to combine the newly-acquired assets from AMS — which includes products for treating benign prostatic hyperplasia, male stress urinary incontinence, and erectile dysfunction — to complement its existing offerings for female urologic and gynecological disorders.

“The combination of Boston Scientific’s Urology and Women’s Health and AMS’ urology portfolios will create a business with nearly $1 billion in annual sales and enable significant synergies and strong future growth prospects through portfolio innovation and international market expansion. We look forward to serving customers and impacting patient care in ways that could not be realized by either company alone,” Mahoney added in the statement.

The transaction will be financed through both existing and newly committed credit facilities, and is expected to result in annual pre-tax synergies of more than $50 million by the end of 2018, according to Boston Scientific’s press release. The company expects the deal to close in the third quarter of this year.

Earlier reports suggested that Boston Scientific was nearing a deal to buy the entire AMS medical device business from Endo for as much as $2 billion. Instead, Endo chose to sell the AMS men’s urology portfolio but held into the AMS women’s health business for treating pelvic organ prolapse and female stress urinary incontinence, which is not included in the deal with Boston Scientific.

However, Endo is “currently evaluating strategic options for the AMS Women’s Health business as well,” according to a Wall Street Journal article. Endo has previously made known its plans to divest its medical device assets to concentrate on its core pharmaceutical business.