Article preview from In-Vivo -October, 2010
Boston Scientific's acquisition of Asthmatx marks a return of the company to the field of strategic buyers with the deal, and in picking Asthmatx, BSX is is reversing a decision it made two years when it sold off its strategic stake in the asthma-device company.
Article preview from In-Vivo -October, 2010
Boston Scientific Corp.'s acquisition of Asthmatx Inc. was the source of many happy returns, three to be exact. [201010121] The deal marks Boston Scientific's return to the field of strategic buyers, and in picking asthma-device company Asthmatx, BSX returns to a company, the equity stake of which it sold off two years ago. Finally, venture capitalists were happy to see a different kind of return; payback for investing in the interventional pulmonology space.
The acquisition, which still needs shareholder approval, marks the first significant acquisition by the beleaguered device giant in five years since the company paid $27 billion to acquire Guidant Corp.. [200510206] Instead of growing through acquisitions as Medtronic Inc., Johnson & Johnson, and others have been doing, Boston Scientific has spent the past three years retreating as it divested itself of non-core businesses and non-essential properties. ( See "Boston Scientific Shuffles and Sells in Bid to Right Ship," IN VIVO, December 2007 [2007800191].) The company was forced to slim down so it could focus resources on the long, uncomfortable assimilation of Guidant.
The company is still trying to sell off its neuromodulation and neurovascular divisions. But analysts now expect Boston Scientific to move off the sidelines and return to buying properties when the fit is right. "Everyone understands that Boston has been through a complicated decade and the choices made in the past were suboptimal and have destroyed capital as opposed to enhancing it," says Rick Wise, managing director at Leerink Swann LLC. "My strong belief is [chief executive] Ray Elliott is setting the company on a more solid growth and profitability path but to do this he's making painful choices."
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