BSX buys unit of American Medical Systems for $1.6B
Boston Scientific has agreed to acquire the urology division of American Medical Systems for about $1.6 billion in cash, the Marlborough-based life sciences company announced Monday morning.
It’s the company’s largest acquisition since it bought cardiovascular products maker Guidant Corp. in 2006 for $27.2 billion.
American Medical Systems (AMS) is a division of Endo International, which is based in Dublin, Ireland. Published reports last week said Boston Scientific (BSX) was close to a deal with Endo for an unspecified unit of AMS.
The urology unit of AMS is based in Minnetonka, Minn., and employs 800 worldwide. The unit includes its men’s health and prostate health business.
The deal calls for $1.6 billion in cash up front plus a potential $50 million based on the unit’s sales in 2016.
Boston Scientific expects to close the acquisition in the third quarter of 2015. The deal is the largest financial acquisition for the company in several years.
Last year, it acquired a Minnesota-based division of Bayer AG for $415 million, along with IOGyn for $65 million. IOGyn, of Cupertino, Calif., had received FDA approval for a system designed to treat uterine fibroids and polyps.
The acquisition encompasses AMS products that treat urologic conditions, including benign prostatic hyperplasia (BPH), male stress urinary incontinence and erectile dysfunction. BSX said the company’s technologies complement its portfolio of products that treat other urological conditions such as kidney stones, pelvic organ prolapse, female stress urinary incontinence and abnormal uterine bleeding. AMS’ urology-related products that treat women are not included in the deal, BSX said.
Boston Scientific President and CEO Mike Mahoney said the acquisition will create a business with annual sales of nearly $1 billion and will enable “strong future growth prospects through portfolio innovation and international market expansion.”
The AMS unit generated sales last year of about $400 million and adjusted operating income of about $130 million, with net income of around $60 million, according to BSX.
Boston Scientific said the deal will result in more than $50 million in annual pre-tax cost savings by the end of 2018. It will boost profits starting in 2016, the company said.
The announcement of the deal comes less than a month after Boston Scientific announced a $600 million out-of-court settlement with rival Johnson & Johnson over BSX’s acquisition of Guidant. That avoided a $7.2-billion lawsuit filed by Johnson & Johnson, which had agreed to buy Guidant before BSX acquired the company for $27.2 billion.
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