Boston Scientific prices $1.85B debt offering

Boston Scientific (NYSE:BSX) yesterday priced a debt offering it plans to use to cover its $1.65 billion acquisition of Endo International‘s (NSDQ:ENDP) American Medical Systems urology business.

Marlborough, Mass.-based Boston Scientific said it also plans to use the proceeds to pay down other debt.

The AMS men’s health & prostate business is slated to be integrated into Boston’s urology & women’s health segment. The deal calls for a $1.6 billion up-front payment and a potential $50 million milestone based on 2016 sales. It’s expected to close during the 3rd quarter.

Rumors that a deal between Boston and Endo could be in the offing surfaced last February, although reports that Endo was shopping the business came to light as early as August 2014. Endo bought pelvic devices maker AMS for $2.9 billion in cash in 2011, before it became embroiled in thousands of high-profile product injury lawsuits over pelvic mesh implants (which also ensnared Boston Scientific and other mesh makers). The deal is Boston Scientific’s largest acquisition since its infamous, $27 billion buyout of Guidant Corp. nearly a decade ago.

The debt offering consists of $600 million of 2.850% senior notes due May 15, 2020; $500 million of 3.375% senior notes due May 15, 2022; and $750 million of 3.850% senior notes due May 15, 2025, Boston Scientific said.

The company said it plans to fund the AMS buy with the proceeds from the debt offering and from a $750 million 5-year term loan. Boston also plans to redeem some or all of its $400 million worth of 5.500% notes due November 2015 and the $600 million in 6.400% notes due June 2016.