Bard EP Deal Latest In Boston Scientific’s M&A; Revival, Bolsters CRM Business

Article preview from IN VIVO - July, 2013

Boston Scientific’s recent acquisition of Bard Electrophysiology marks the tenth notable acquisition that it has made since 2010. Four of those deals come in cardiac rhythm management, including EP, which is among the fastest-growing device sectors and one that company executives see as a major contributor to future growth.

Bard EP Deal Latest In Boston Scientific’s M&A Revival, Bolsters CRM Business

Article preview from IN VIVO - July, 2013

After sitting on the dealmaking sidelines just a few years ago while trying to figure out how to digest its $27 billion acquisition of Guidant Corp. in 2005, Boston Scientific Corp. is back in the M&A game, which is welcome news to device start-ups worldwide. [See Deal] Its recent acquisition of Bard Electrophysiology (EP), a division of CR Bard Inc., marks the tenth notable acquisition that Boston Scientific has made since 2010. Four of those deals come in cardiac rhythm management (CRM), including EP, which is among the fastest-growing device sectors and one that company executives see as a major contributor to future growth. [See Deal]

Throughout the early 2000s, Boston Scientific was one of the most aggressive strategic acquirers, pioneering the practice of taking small equity stakes in numerous start-ups through structured deals tied to a variety of milestones, a practice that today is common in the industry. However, after the Guidant acquisition, Boston Scientific not only got out of M&A for the most part, but it also divested most of its portfolio of minority start-up investments, largely in a single transaction, selling its stake in 54 companies to Saints Capital in 2008.

Boston Scientific found itself hampered not just by the debt it took on with the Guidant deal, but the company also inherited significant problems with Guidant’s CRM devices, including product recalls. All of this was taking place against a backdrop of a general global decline in the CRM market attributable to a number of factors, including the economic collapse, a US Justice Department investigation, and clinical publications claiming that these devices were being over-used in patients who should not have been medically eligible to have these devices implanted.

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