Boston Scientific (NYSE:BSX) announced today that it agreed to acquire Silk Road Medical (Nasdaq:SILK) in a deal worth approximately $1.16 billion.
Marlborough, Massachusetts–based Boston Scientific agreed to purchase Silk Road Medical at a price of $27.50 per share. Sunnyvale, California-based Silk Road Medical develops products designed to prevent stroke in patients with carotid artery disease. The technology is used in a minimally invasive procedure called transcarotid artery revascularization (TCAR).
TCAR involves accessing the carotid artery through a small incision on the neck and temporarily reversing blood flow away from the brain. This prevents plaque from dislodging and causing a stroke. Patients then have a stent placed at the blockage site for long-term plaque stabilization and future stroke prevention. Silk Road Medical won FDA approval for its TCAR system in 2015.
“The TCAR platform developed by Silk Road Medical is a notable advancement in the field of vascular medicine, which has revolutionized stroke prevention and the treatment of carotid artery disease,” said Cat Jennings, president, Vascular, Peripheral Interventions, Boston Scientific. “We believe the addition of this clinically differentiated technology to our vascular portfolio demonstrates our continued commitment to provide meaningful innovation for physicians who care for patients with peripheral vascular disease.”
More about the latest acquisition by Boston Scientific
Boston Scientific expects to complete the transaction in the second half of this year.
Silk Road Medical offered guidance for revenues of approximately $194 million to $198 million in 2024. That would represent growth of 10%-12% over the previous fiscal year.
Boston Scientific anticipates an immaterial impact from the acquisition on its adjusted earnings per share in 2024 and 2025. It then projects an accretive impact thereafter. The company also expects a less accretive, or dilutive, impact on GAAP earnings due to amortization expenses and acquisition-related charges.
This marks the latest M&A play by Boston Scientific, which last fall outlined the key role of M&A in its overarching business plan. The company had just announced the acquisition of Relievant Medsystems, which it completed in November. In January, Boston Scientific announced its plans to buy Axonics and its neuromodulation and hydrogel technologies. Those two deals combined totaled costs of more than $4.5 billion ($3.7 billion for Axonics, $850 million for Relievant). However, the Axonics deal has yet to be completed after the FTC requested more information on the acquisition in April.
Other M&A moves by Boston Scientific over the past several years include the acquisition of a majority stake in Acotec, worth around $523 million, at the end of 2022. In April 2023, the company completed a $615 million acquisition of Apollo Endosurgery. Previous years also include buys of Farapulse, Baylis Medical and Lumenis.
The analysts’ view
BTIG analysts Marie Thibault and Sam Eiber maintained their “Buy” rating for Boston Scientific following the announcement.
The analysts note that the company currently doesn’t have a TCAR product but does have a carotid wall stent monorail endoprosthesis and embolic protection system for patients undergoing carotid revascularization through carotid artery stenting. They believe Boston Scientific can use its resources to increase TCAR penetration within the U.S.
Other potential avenues with this acquisition include new product launches and expansion into new markets like Japan and China.
“While there are several companies that may have interest in TCAR, we think the transaction price represents a reasonable valuation for SILK given anticipated sales growth rate and EBITDA margin profile,” the analysts wrote.
