Boston Scientific has entered into an agreement with an affiliate of Baring Private Equity Asia (BPEA) to acquire the surgical business of Lumenis LTD for an upfront cash payment of $1.07 billion. The deal is subject to close in the second half of this year.
Lumenis’s surgical business develops energy-based medical solutions, which include laser systems, fibers and accessories used for urology and otolaryngology procedures. The Yokneam, Israel-based company said the MOSES technology, which has demonstrated differentiated clinical outcomes and efficiency in the management of patients with kidney stones, is foundational to its urology portfolio.
"The MOSES laser technology, paired with our LithoVue Single-Use Digital Flexible Ureteroscope and comprehensive kidney stone management portfolio, will enable execution of our strategy for our stone franchise," said Meghan Scanlon, senior vice president and president, Urology and Pelvic Health, Boston Scientific. "With double-digit compound annual growth from 2015 to 2019, we look forward to adding the innovative Lumenis laser portfolio, talented employees and surgical laser center of excellence to our organization. The acquisition will expand our global footprint throughout Europe and Asia and accelerate the delivery of our robust stone management offerings to more urologists – ultimately serving more patients worldwide – while also improving our top-line growth and margins."
The surgical unit’s net sales are anticipated to be $200 million. BPEA will retain ownership of the Lumenis global aesthetics and ophthalmology businesses.
Marie Thibault, a medtech analyst at BTIG and a former managing editor at MD+DI, noted in a report "this acquisition makes sense to us as a clearly complementary product portfolio that Boston Scientific has had success selling.
Boston Scientific had been relatively quiet in 2020 regarding acquisitions. The quiet period came on the heels of Boston Scientific's intense 2018 buying spree.
However, Boston Scientific returned to the M&A trail earlier this year with the proposed acquisition of Preventice Solutions for $925 million with the potential for milestones. The Marlborough, MA-based company recently announced it closed the deal.
In a research note, Needham and Co analyst Mike Matson wrote, " Boston Scientific's M&A pace seems to be picking up and we believe that its acquisition strategy has been a key factor behind its above-peer organic growth and we reiterate our buy rating."
In addition, the firm noted it had completed the sale of its BTG Specialty Pharmaceuticals business to Stark International Lux S.A.R.L. and SERP SAS.
During the firm’s most recent earnings call, Daniel Brennan, executive vice president and CFO , Boston Scientific, commented on upcoming plans for M&A.
“Our top priority for capital deployment remains tuck-in M&,” Brennan said according to a Seeking Alpha transcript of the earnings call. “We have capacity to pursue additional business development opportunities, while continuing to remain active within our venture capital portfolio, and take advantage of opportunistic share repurchase as we did in December.”