Summary
Boston Scientific Corporation (BSX) has entered into a definitive agreement to sell its Neurovascular business to Stryker Corporation for $1.5 billion in cash. The transaction, expected to close by year-end 2010, is subject to regulatory approvals and customary closing conditions. A significant portion of the proceeds, estimated to be over $500 million in gain before considering milestone payments, will be used to fund acquisitions and reduce debt. The divestiture is anticipated to dilute Boston Scientific's 2011 earnings per share by approximately four to six cents on both GAAP and adjusted bases. The company will provide transitional services and product supply to Stryker for up to 24 months post-closing. Due to ongoing involvement during this transition, the Neurovascular business will continue to be reported within continuing operations for historical periods.
Key Highlights
- 1Divestiture of Neurovascular business to Stryker Corporation for $1.5 billion in cash.
- 2Transaction expected to close before the end of 2010, subject to regulatory clearances.
- 3Anticipated gain on sale exceeding $500 million before milestone payments.
- 4Net proceeds expected to be around $1.2 billion after-tax, to be allocated to acquisitions and debt retirement.
- 5Projected 2011 EPS dilution of approximately $0.04-$0.06 on both GAAP and adjusted bases.
- 6Transitional services and supply agreements with Stryker for up to 24 months post-closing.
- 7Neurovascular business to remain part of continuing operations due to ongoing involvement.