Boston Scientific Snags Endo International's Urology Portfolio in Deal Worth $1.65 Billion

Boston Scientific (BSX) Snags Endo International (ENDP)'s Urology Portfolio in Deal Worth $1.65 Billion
March 2, 2015
By Riley McDermid, Breaking News Sr. Editor

Specialty healthcare company Endo International is selling its men’s health and prostate businesses to Boston Scientific Corp. for $1.6 billion, as it attempts to refocus its efforts on more lucrative parts of its portfolio and regain revenue after a rocky 2014.

As part of the deal, Boston Scientific, which enjoyed a nice boost in morning trading Monday on the news, will wrap the new unit into its own urology and women’s health department. It also will shell out a potential additional $50 million milestone based on 2016 sales with the deal slated to close in the third quarter of 2015.

"We believe this strategic acquisition will strengthen Boston Scientific's global leadership in the urology device category while delivering a strong return to our investors," said Mike Mahoney, president and chief executive officer of Boston Scientific.

The AMS Men's Health and Prostate Health now headed to Boston Scientific is based in Minnetonka, Minn., has around 800 employees worldwide, said the company. It saw 2014 sales of approximately $400 million and adjusted operating income of approximately $130 million, excluding amortization and certain allocated expenses, which, when combined with Boston Scientific’s own unit, could create a nearly $1 billion entity.

"The combination of Boston Scientific's Urology and Women's Health and AMS' urology portfolios will create a business with nearly $1 billion in annual sales and enable significant synergies and strong future growth prospects through portfolio innovation and international market expansion,” said Mahoney. “We look forward to serving customers and impacting patient care in ways that could not be realized by either company alone."

Endo disappointed analysts earlier this year when it projected revenue between $2.9 billion and $3 billion, well below the $3.48 billion that had been the consensus target, and with earning per share of only $4.35 to $4.55 compared to $4.88 consensus.

Those numbers have had both shareholders and Wall Street pressuring Endo to unload some of its less profitable business lines and instead beef up lucrative areas such as blockbuster and generic drugs. Endo responded by snapping up Boca Pharmacal and DAVA Pharmaceuticals last year, a move which caused its revenue in those area to skyrocket 70 percent for the fourth quarter.

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