Boston Scientific Sells Two Units for $750M

Medical device maker Boston Scientific Corp. announced the sale of its cardiac surgery and vascular surgery units to Swedish health-care equipment provider Getinge AB for $750 million. The all-cash deal is expected to close in between 45 and 90 days. According to Swedbank analyst Johan Unnerus, "The price seems fair, and this suits Getinge very well since they want to grow in the U.S." Boston Scientific acquired the units when it purchased Guidant Corp. in April 2006, taking on $8.3 billion in debt to finance the deal. The company reported a $272 million loss in its latest quarter, on a 22% drop in the sale of drug-coated stents (full story). Stent sales have suffered recently on an industry-wide basis as their efficacy has been called into question. Boston Scientific CEO and President Jim Tobin said these sales are part of "a previously announced element of our plan to divest non-strategic assets, focus on our core businesses and increase shareholder value." BSX shares are down 23% YTD as investors continue to worry about the firm's excessive debt, towards which it continutes to divest its non-core assets. Shares were unchanged in pre-market trading.

Sources: Press release, Reuters, Dow Jones Newswires, MarketWatch, 24/7 Wall Street
Commentary: Boston Scientific Unit Sale Digs It Out of Hole [Blogging Stocks] • Boston Scientific Up After Earnings Beat and Signs of Progress • Boston Scientific Puts More Units Up for Sale • Boston Scientific: A Buyout Waiting to Happen
Stocks/ETFs to watch: BSX. Competitors: JNJ, MDT, STJ. ETFs: IHI
Earnings call transcript: Boston Scientific Q3 2007

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