Summary
Boston Scientific Corporation (BSX) has filed an 8-K report detailing significant amendments to its 2004 merger agreement with Advanced Bionics. The company is restructuring its acquisition of Advanced Bionics, which will result in Boston Scientific gaining sole management and control over the pain management business, including its emerging indications program. This strategic shift aims to streamline operations and focus on core areas. Key to this restructuring is a revised earn-out payment schedule for former Advanced Bionics shareholders, totaling $1.15 billion payable in January 2008 and March 2009. Concurrently, Boston Scientific is selling a controlling interest in the auditory business and drug pump development program for $150 million to entities affiliated with Advanced Bionics' principals. These transactions are expected to close in January 2008, subject to shareholder and regulatory approvals. The company anticipates recording a significant after-tax charge of approximately $360 million in Q3 2007, primarily due to goodwill and intangible asset impairment stemming from these changes.
Key Highlights
- 1Amended merger agreement with Advanced Bionics grants Boston Scientific sole management of the pain management business.
- 2Revised earn-out payments to former Advanced Bionics shareholders total $1.15 billion, payable in January 2008 ($650 million) and March 2009 ($500 million).
- 3Boston Scientific will sell a controlling interest in the auditory business and drug pump development program for $150 million.
- 4Transactions are expected to close in January 2008, pending shareholder and regulatory approvals.
- 5An estimated after-tax charge of $360 million is anticipated in Q3 2007, primarily for goodwill and intangible asset impairment.
- 6The settlement of pending litigation between BSX and former Advanced Bionics shareholders is contingent on the closing of these transactions.