Boston Scientific to explore divestment of surgical products unit
18 Aug 2007
Boston Scientific Corporation is exploring the sale of its cardiac surgery and vascular surgery businesses in line with its proposed shedding of non-strategic assets, and to strengthen its operating and financial performance, by reducing debt incurred by the $27-billion acquisition of Guidant Corporation.
Paul LaViolette, chief operating officer, Boston Scientific, said, "This is another step in the progress we are making on our plan to divest non-strategic assets, monetise our investment portfolio and bring our expenses and head count in line with our revenues," added LaViolette.
"As part of an ongoing review of our assets, we have initiated a process to explore the sale of our cardiac surgery and vascular surgery businesses. We are in discussions with several potential buyers, and we expect the process to take a number of months," said Paul LaViolette, chief operating officer of Boston Scientific.
The company acquired the cardiac surgery business in April 2006 as part of the Guidant acquisition. The cardiac surgery business had 2006 revenues of $189 million and is leading developer of medical technologies designed to provide less-invasive therapies in cardiac surgery, including beating heart bypass surgery systems, endoscopic vessel harvesting for coronary bypass surgery, and microwave surgical ablation.
It makes devices like retractors that hold the chest open during heart surgery and vacuum cups that help doctors performing bypass surgery hold beating hearts steady or turn them to one side. It also makes devices for harvesting blood vessels from other parts of the body that are then sewn into the heart to bypass clogged coronary arteries.
It established its Vascular Surgery business with the acquisition of Meadox Medicals in 1995. The vascular surgery business develops market-leading synthetic grafts and patches for repair of abdominal aortic aneurysms and peripheral vascular anatomy. The business had 2006 revenues of $86 million.
"We have now identified three non-strategic businesses to divest, and we are in discussions with potential buyers for all three. In recent months we have retained our endosurgery group, entered into an agreement to assume sole management and control of our pain management business from advanced bionics and sell the advanced bionics auditory business, monetised parts of our portfolio, and begun developing an expense and head count reduction plan, which we plan to announce next quarter.
"In addition, we continue to focus on the recovery of the drug-eluting stent and cardiac rhythm management markets. Together, these measures should combine to help us achieve our overall goals of restoring profitable growth, increasing shareholder value, and continuing to build and strengthen Boston Scientific," he added.
Boston Scientific has been hurt the slowdown in its stents and defibrillator implants businesses on which it was relying to repay the debt accumulated in last year''s $27- billion takeover of the Guidant Corporation.
