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Boston Scientific's (BSX) New Buyout to Expand Global Presence
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Boston Scientific Corporation (BSX - Free Report) recently announced that the company would make a partial offer to acquire a majority stake, up to a maximum of 65%, of shares of Acotec Scientific Holdings. The completion of the transaction is expected in the first half of 2023, subject to acceptance and approval by Acotec shareholders and other conditions outlined in related filings.
For investors’ note, Acotec is a Chinese medical technology company that provides solutions intended for a variety of interventional procedures.
With the new buyout, Boston Scientific aims to strengthen its MedSurg segment footprint in the global market.
Financial Details
The proposed price is HK$20/share, representing a total upfront cash payment consideration of $523M for the 65% stake at current exchange rates.
Moreover, due to amortization expense and acquisition-related net charges, Boston Scientific expects the impact on adjusted earnings per share (EPS) to be immaterial in 2023 and the impact on GAAP EPS to be dilutive.
More on Acotec
Acotec is a leading medical technology company that focuses on innovative interventional treatments with research and development expertise, manufacturing capabilities and a local sales network.
The company launched the first peripheral DCB in China in 2016. Moreover, the Acotec portfolio includes radiofrequency ablation technologies, thrombus aspiration catheters and over 20 other products in various stages of development across an array of specialties.
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In the past 12 months, Actotec generated sales of around $53 million, growing 25% year over year in the first six months of 2022 with strong double-digit growth in each of the two years prior.
Strategic Implications
Per Boston Scientific’s management, Acotec is a profitable, fast-growing company with a strong portfolio and innovative pipeline of medical technologies with an expanded presence in China. The completion of the partial offer is expected to strengthen the company’s presence in China and create the potential for the commercialization of Acotec products globally, offering an increased number of physicians and patients access to its robust and complementary product portfolio.
Industry Prospects
According to the latest research by McKinsey & Co, China’s healthcare market is projected to grow at a CAGR of nearly 12%, reaching $2.3 trillion by 2030. Improvements in infrastructure, the broadening of insurance coverage and significant support for innovation are the key catalysts driving the market.
Recent Developments
In November 2022, Boston Scientific entered into a definitive agreement to acquire Apollo Endosurgery for a cash price of $10 per share.The acquisition is expected to expand Boston Scientific’s endoluminal surgery portfolio and add differentiated technologies for endobariatric procedures.
In the same month, Boston Scientific announced the first results from the ACURATE neo2 Post Market Clinical Follow-up (PMCF) study assessing the performance of the ACURATE neo2TM Aortic Valve System. The findings demonstrated a high procedural success rate of 98.4% and low mortality and paravalvular leak rates, presented during a late-breaking clinical trial session at PCR London Valves 2022.
Price Performance
Shares of the company have gained 11.6% in a year against the industry’s fall of 44%.
Zacks Rank and Key Picks
Currently, Boston Scientific carries a Zacks Rank #3 (Hold).
A couple of better-ranked stocks in the broader medical space that investors can consider are ShockWave Medical, Inc. (SWAV - Free Report) and Merit Medical System (MMSI - Free Report) .
ShockWave Medical, sporting a Zacks Rank #2 (Buy) at present, has an estimated growth rate of 33.1% for 2023. The company’s earnings surpassed estimates in all the trailing four quarters, the average beat being 180.1%.
Merit Medical, currently carrying a Zacks Rank of 2, reported third-quarter 2022 adjusted EPS of 64 cents, which beat the Zacks Consensus Estimate by 20.8%. Revenues of $287.2 million outpaced the consensus mark by 5.2%.
Merit Medical has an estimated long-term growth rate of 11%. MMSI’s earnings surpassed estimates in all the trailing four quarters, the average being 25.4%.
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Boston Scientific's (BSX) New Buyout to Expand Global Presence
Boston Scientific Corporation (BSX - Free Report) recently announced that the company would make a partial offer to acquire a majority stake, up to a maximum of 65%, of shares of Acotec Scientific Holdings. The completion of the transaction is expected in the first half of 2023, subject to acceptance and approval by Acotec shareholders and other conditions outlined in related filings.
For investors’ note, Acotec is a Chinese medical technology company that provides solutions intended for a variety of interventional procedures.
With the new buyout, Boston Scientific aims to strengthen its MedSurg segment footprint in the global market.
Financial Details
The proposed price is HK$20/share, representing a total upfront cash payment consideration of $523M for the 65% stake at current exchange rates.
Moreover, due to amortization expense and acquisition-related net charges, Boston Scientific expects the impact on adjusted earnings per share (EPS) to be immaterial in 2023 and the impact on GAAP EPS to be dilutive.
More on Acotec
Acotec is a leading medical technology company that focuses on innovative interventional treatments with research and development expertise, manufacturing capabilities and a local sales network.
The company launched the first peripheral DCB in China in 2016. Moreover, the Acotec portfolio includes radiofrequency ablation technologies, thrombus aspiration catheters and over 20 other products in various stages of development across an array of specialties.
In the past 12 months, Actotec generated sales of around $53 million, growing 25% year over year in the first six months of 2022 with strong double-digit growth in each of the two years prior.
Strategic Implications
Per Boston Scientific’s management, Acotec is a profitable, fast-growing company with a strong portfolio and innovative pipeline of medical technologies with an expanded presence in China. The completion of the partial offer is expected to strengthen the company’s presence in China and create the potential for the commercialization of Acotec products globally, offering an increased number of physicians and patients access to its robust and complementary product portfolio.
Industry Prospects
According to the latest research by McKinsey & Co, China’s healthcare market is projected to grow at a CAGR of nearly 12%, reaching $2.3 trillion by 2030. Improvements in infrastructure, the broadening of insurance coverage and significant support for innovation are the key catalysts driving the market.
Recent Developments
In November 2022, Boston Scientific entered into a definitive agreement to acquire Apollo Endosurgery for a cash price of $10 per share.The acquisition is expected to expand Boston Scientific’s endoluminal surgery portfolio and add differentiated technologies for endobariatric procedures.
In the same month, Boston Scientific announced the first results from the ACURATE neo2 Post Market Clinical Follow-up (PMCF) study assessing the performance of the ACURATE neo2TM Aortic Valve System. The findings demonstrated a high procedural success rate of 98.4% and low mortality and paravalvular leak rates, presented during a late-breaking clinical trial session at PCR London Valves 2022.
Price Performance
Shares of the company have gained 11.6% in a year against the industry’s fall of 44%.
Zacks Rank and Key Picks
Currently, Boston Scientific carries a Zacks Rank #3 (Hold).
A couple of better-ranked stocks in the broader medical space that investors can consider are ShockWave Medical, Inc. (SWAV - Free Report) and Merit Medical System (MMSI - Free Report) .
ShockWave Medical, sporting a Zacks Rank #2 (Buy) at present, has an estimated growth rate of 33.1% for 2023. The company’s earnings surpassed estimates in all the trailing four quarters, the average beat being 180.1%.
ShockWave Medical has outperformed its industry in the past year. SWAV has gained 35% against the industry’s 32.6% fall in the past year. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Merit Medical, currently carrying a Zacks Rank of 2, reported third-quarter 2022 adjusted EPS of 64 cents, which beat the Zacks Consensus Estimate by 20.8%. Revenues of $287.2 million outpaced the consensus mark by 5.2%.
Merit Medical has an estimated long-term growth rate of 11%. MMSI’s earnings surpassed estimates in all the trailing four quarters, the average being 25.4%.