Dive Brief
- Boston Scientific has agreed to acquire Silk Road Medical, a maker of stroke prevention devices, for $27.50 per share in cash, or an equity value of about $1.26 billion, the companies said Tuesday.
- Silk Road’s products are the only commercially available devices for use during a minimally invasive procedure called transcarotid artery revascularization (TCAR) to treat patients with carotid artery disease, according to Boston Scientific.
- “We view the deal as largely inexpensive for Boston yet meaningful enough to move the needle on growth in the peripheral interventions business,” J.P. Morgan analyst Robbie Marcus said in a note to clients.
Dive Insight
Carotid artery disease, a buildup of plaque in the carotid arteries of the neck that decreases blood flow to the brain, is a common cause of stroke.
Silk Road’s TCAR system, approved by the Food and Drug Administration in 2015, is designed to reduce stroke risk and complications associated with traditional open surgery, Boston Scientific said.
In the procedure, a small incision is made in the neck to access the carotid artery to temporarily reverse blood flow away from the brain to prevent plaque from dislodging. A stent is then placed at the site of the blockage to stabilize the plaque for long-term stroke prevention.
“The addition of this clinically differentiated technology to our vascular portfolio demonstrates our continued commitment to provide meaningful innovation for physicians who care for patients with peripheral vascular disease,” Cat Jennings, president of vascular, peripheral interventions, at Boston Scientific, said in a statement.
Silk Road Medical expects to generate net revenue of from about $194 million to $198 million in 2024, representing growth of from 10% to 12% over the prior fiscal year, Boston Scientific said.
The impact to Boston Scientific’s adjusted earnings per share is expected to be immaterial in 2024 and 2025 and accretive after that.
The purchase price reflects Silk Road’s enterprise value of about $1.16 billion and $101 million cash position, Boston Scientific said. The price per share represents roughly a 38% premium to Silk Road’s volume-weighted average share price over the past 60 days.
BTIG analyst Marie Thibault said Boston Scientific can use its resources to increase TCAR adoption in the U.S. market, launch new products and expand into new markets, including Japan and China.
“We view this deal as a tuck-in for BSX that will help expand its Peripheral Interventions segment by reaching existing physician call points,” the analyst wrote in a research note.
Boston Scientific said it expects to complete the acquisition in the second half of the year.
The M&A market for healthcare companies continues to build on STRATEGIC opportunities. The strategic corporate buyers and private equity investors remain committed to acquiring strong businesses that are well prepared for a transaction. Across the continuum of care, these buyers and investors are looking for well established, profitable businesses and offering prime valuations and options for management.
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