Summary
Boston Scientific Corporation (BSX) announced the completion of its acquisition of Advanced Bionics Corporation on June 1, 2004. This acquisition, valued at approximately $740 million in cash upfront, includes a significant earnout component tied to future performance milestones based on net sales and profitability across four technology platforms. The transaction was funded through commercial paper issuance. Advanced Bionics, a developer of neurostimulation devices such as cochlear implants, reported net sales of $56.4 million in 2003, with a net loss of $42.4 million. The company's financial statements reveal a history of operating losses, with reliance on capital raises and potential support from its Chairman. The acquisition is expected to expand Boston Scientific's presence in the neuromodulation market, though the substantial earnout structure introduces contingent future liabilities and performance-dependent costs.
Key Highlights
- 1Boston Scientific acquired Advanced Bionics Corporation on June 1, 2004, for an initial cash payment of approximately $740 million.
- 2The acquisition includes a substantial earnout provision tied to future performance milestones related to net sales and profitability.
- 3Advanced Bionics reported 2003 net sales of $56.4 million and a net loss of $42.4 million.
- 4The initial purchase price was funded by the issuance of commercial paper.
- 5Advanced Bionics specializes in neurostimulation devices, including cochlear implants.
- 6The transaction expands Boston Scientific's portfolio in the medical device sector.