Summary
Boston Scientific Corporation (BSX) disclosed the resolution of a legal dispute with Channel Medsystems, Inc. concerning an acquisition agreement. The dispute stemmed from the termination of an agreement where BSX could have acquired Channel for up to $145 million upfront plus $130 million in contingent payments. Channel sued BSX for breach of contract after the termination, and BSX counterclaimed for fraud. Following FDA approval of Channel's Cerene™ Cryotherapy Device in April 2019, Channel sought to exercise its option to sell its remaining equity interests to BSX, which BSX contested due to the prior termination. The Delaware Chancery Court ruled in favor of Channel in December 2019, finding that BSX was not entitled to terminate the agreement and ordered specific performance requiring BSX to close the merger. Subsequently, on February 4, 2020, BSX settled the dispute, agreeing to an undisclosed payment and surrendering its equity interest in Channel. This settlement effectively terminates the original acquisition agreement.
Key Highlights
- 1Boston Scientific (BSX) has settled a legal dispute with Channel Medsystems, Inc. concerning a previously terminated acquisition agreement.
- 2The dispute centered on BSX's termination of an agreement to acquire Channel, with Channel subsequently suing for breach of contract and BSX counterclaiming for fraud.
- 3A Delaware Chancery Court ruled in December 2019 that BSX was not entitled to terminate the agreement and ordered specific performance for the merger.
- 4The settlement, finalized on February 4, 2020, involved an undisclosed payment by BSX and the surrender of BSX's equity interest in Channel.
- 5This settlement resolves the legal action and terminates the acquisition agreement, ending potential future obligations for BSX related to the deal.
- 6The financial impact of the settlement payment is not disclosed in this filing.