Shockwave Medical jumps on report of Boston Scientific takeover interest

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• Shockwave Medical (NASDAQ:SWAV) rose 8.5% on a report that Boston Scientific (NYSE:BSX) is said to be considering a takeover.
• Boston Scientific (BSX) has been reviewing a potential acquisition of Shockwave (SWAV) to boost its cardiovascular devices business, according to a Bloomberg report, which cited people familiar. Shockwave has a market cap of $9.6 billion.
• The latest news comes after Bloomberg reported in January of last year that Shockwave (SWAV) received takeover interest. The company was working with an adviser to consider a merger or partnership with another health-care company.
• Shockwave (SWAV) is set to report Q1 results on May 8, while Boston Scientific (BSX) is scheduled to report results on Wednesday.

Comments

[Purewater]

CEO gets a $30 mm payout if there is a change of control.
COO gets $15mm
CFO gets $10mm.

They are totally incentivized to sell out. Page 59
ir.shockwavemedical.com/...

[Valleywood]

@Purewater To you and to me, those are huge numbers. But to people who have brought SWAV this far, those numbers are modest. The plum for them was to keep SWAV going on its own for five more years. There may be position sweeteners for all three in the new BSX........ If this goes through.

[Off His Game]

@Purewater Also - Prior to HeartWare, Doug held other executive and leadership positions at Boston Scientific, including President of the Vascular Surgery Division, member of Boston Sci’s Operating Committee and Vice President of Business Development where he was responsible for more than 70 transactions, many in the arena of coronary and peripheral interventions.

He knows the entire management team at BS as well. This is pretty common in the markets - people split off to do their own thing and end up selling back to companies they worked at before. His payout if they sold for $400+ is around $100 million it seems. N

[Purewater]

@Off His Game Good info...How are you getting to $100mm?

[Jacob 12345]

Will this be good for BSX?

[Valleywood]

@Jacob 12345 I strongly suspect this would be a very nice growth area for BSX. That said, BSX is a fine company on its own. If stock is part of this buyout I would have to consider keeping some BSX equity if offered. Nevertheless, I am deeply disappointed in this turn of events. I had SWAV as a powerful rocket engine for my account. It takes years to find something like SWAV, and I have nothing on my radar that matches it. Sigh.

[Off His Game]

@Valleywood While I agree overall, NARI and INSP are both pretty clean stories too in medtech. INSP has a similar chart, NARI has competition from PEN but is also a buyout target.

[DomL]

@Valleywood PRCT is taking off.

[Rolf Stumpf]

Seems that February was a nice entry time...

[Bill_Wallace]

The buyout is mostly already priced in. The shares have gone from $180 in March to $280 in April (one month). So the people in the know already loaded up and are selling into this news.

[DomL]

@Bill_Wallace seems like it. I hope no buyout and it sells off

[smadadet]

I hope this doesn't happen. SWAV has a long upward way to go and I can see a $500 stock price in two years. With this news, I would expect Abbott and Medtronic to also enter sweepstakes.

[BluechipDividendHunter]

@smadadet abbott will not since they just bought CSII which has been working on similar technoloogy.

[anoopokhai]

@BluechipDividendHunter I thought $ABT would have gone for $SWAV - they were one of the few who could afford it. $CSII not even close second…

[SuperPac]

Shockwave !
That's a weird name for a medical equipment company.
Some would perhaps say that it's a terrible name for a med eq co.

[Off His Game]

@SuperPac Why do you say that? Do you know what they do?

[smadadet]

@SuperPac They use a shockwave to break up calcium deposits in Arteries. It is a perfect name.

[DomL]

@SuperPac lol

[Valleywood]

Intuitive surgical may have something to say about this.

[Off His Game]

@Valleywood Don't think that's their area of expertise :)

[Off His Game]

It feels like a deal that can't happen right now... SWAV management would ask for what $380-400 a share?

Loxo was bought a few years ago after a massive run in the stock, its possible but unlikely BSX would pay that much.

[Another Mountain's Rock Investing]

@Off His Game but u need to think long term. Do you want a competitor gaining access to the tech? Or lose market share of your own products? Acquisitions aren't only about the price.

[Off His Game]

@another Mountain's Rock Investing I feel more than half are done at a time when valuations are at a trough. Will see what happens but I am skeptical.

At the same time if the price was $380 I would almost rather it not get bought.

[lbeachmike]

@Off His Game This has been one of my best performers. I never prefer when one of my best-performing stocks gets acquired. But if it is at $380, then the short-term premium should make up for it if the money can be moved into another solid performer.