Boston Scientific to sell two businesses to private equity firm
14 December 2007 Boston Scientific Corporation (NYSE:BSX) is to sell
its fluid management and venous access businesses to private equity firm
Avista Capital Partners for $425 million. The transaction is expected to
close in the first quarter of 2008. Boston Scientific had previously
announced its intent to sell these businesses as part of its plan to divest
non-strategic assets. In addition to the two sales announced yesterday,
Boston Scientific has also recently announced agreements to sell its cardiac
surgery, vascular surgery and auditory businesses. Boston Scientific stock
price fell by about 0.4 yesterday to 12.22, almost its lowest level for the
year — this was 11.98 in November. The price was over 40 in June 2004 and
has been on a general decline since. Avista said that the combined
businesses will operate as an independent company under a new name. Ron
Sparks, an Avista healthcare industry advisor, will become Chairman and
Chief Executive Officer of the new company. Dave McClellan, President of
Boston Scientific's Oncology business, will become President of the new
company. The Fluid Management franchise, formerly North American Medical
Instruments Corporation (NAMIC), produces a range of products used to manage
fluid and measure pressure during angiography and angioplasty procedures. It
employs approximately 750 people in its Glens Falls, New York, manufacturing
facility. The Venous Access franchise, whose products are also
manufactured in Glens Falls, offers a leading portfolio of implantable
devices designed to provide access to the blood stream for patients
requiring intravenous antibiotics, nutrition, chemotherapy and blood
sampling. The Venous Access franchise is part of Boston Scientific's
oncology business, and employs approximately 150 people in locations around
the United States. Projected revenue for the two businesses in 2007 is
approximately $170 million.
"We now have under agreement the divestitures of all five non-strategic
businesses we had previously identified for sale," said Jim Tobin, President
and Chief Executive Officer of Boston Scientific. "In addition, our expense
and head count reduction initiative is well under way, and we continue to
make progress monetizing our investment portfolio and restructuring several
businesses. These measures should help us further our overall goals of
restoring profitable growth, increasing shareholder value and continuing to
strengthen Boston Scientific for the future." Fluid Management/Venous
Access will be Avista's fifth investment in the healthcare industry. In
2007, Avista made healthcare investments in BioReliance and VWR
International and, in 2006, in Nycomed and MedServe. To top
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