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Boston Scientific Completes Its Acquisition of EndoChoice

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Deal overview

On November 22, 2016, Boston Scientific (BSX) announced the completion of its acquisition of EndoChoice Holdings. The deal was valued at $210 million in cash at a price of $8.00 per share. This acquisition was announced on September 27, 2016. As discussed in Boston Scientific’s Acquisition of EndoChoice: Must-Know Details, the deal is expected to be earnings accretive after 2017.

Endochoice Holdings provides products and services for the treatment of a wide range of gastrointestinal diseases. The business would become part of Boston Scientific’s Endoscopy business after the acquisition. EndoChoice Holdings posted $75 million in sales during the trailing 12-month period ended September 30, 2016.

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Strategic benefits

The comprehensive EndoChoice Gastrointestinal portfolio, ranging from Infection Control to Pathology Services, is expected to enhance Boston Scientific’s portfolio offerings in its Endoscopy business. Endoscopy is the key division of Boston Scientific’s MedSurg segment, which generates the majority of its revenues, as shown in the chart above.

According to Boston Scientific’s Art Butcher, senior vice president and president, Endoscopy, “We are excited to provide physicians more comprehensive solutions to help assess, diagnose and treat patients with GI conditions. Boston Scientific is a leader in the field of endoscopy and we are committed to providing innovative products and services to meet the changing and growing needs within the field.”

Among Boston Scientific’s major competitors, Abbott Laboratories (ABT), Thermo Fisher Scientific (TMO), and Stryker (SYK) have been growing at a rapid pace by pursuing strategic inorganic growth. The Guggenheim S&P 500 Equal Weight ETF (RSP) invests ~0.17% of its portfolio in Boston Scientific (BSX).

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