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Boston Scientific to acquire Preventice Solutions

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Boston Scientific (NYSE:BSX) announced today that it entered into a definitive agreement to acquire Preventice Solutions.

Minneapolis-based Preventice designs mobile health solutions and remote monitoring services for patients with cardiac arrhythmias. Its wearables include the PatientCare platform and BodyGuardian family of monitors.

Preventice’s BodyGuardian monitors use a fully-integrated, cloud-based platform for clinical technicians and AI algorithms to provide insights leading to improved clinical diagnoses and outcomes. The company’s BodyGuardian Mini Plus, the newest system in its portfolio, features multiple electrode options to enhance rhythm detection while it is also waterproof, repositionable and can be used in all modalities of short-term and long-term monitoring.

Marlborough, Mass.-based Boston Scientific’s acquisition of the company includes an upfront cash payment of $925 million with an additional $300 million available in a potential commercial milestone payment.

The company has been an investor in Preventice since 2015 and currently holds an equity stake of approximately 22%. Boston Scientific expects that equity stake to result in a net payment of approximately $720 million upon closing, plus a milestone payment of up to approximately $230 million.

Preventice brought in net sales of $158 million in 2020, marking 30% growth year-over-year, according to a Boston Scientific news release.

“This acquisition will provide Boston Scientific with a foothold in the high-growth ambulatory electrocardiography space, which strongly complements our recent entrance into the implantable cardiac monitor market and will serve as an important component of our category leadership strategy in cardiac diagnostics and services – a nearly $2B market anticipated to grow double digits annually,” Boston Scientific senior VP & president of its rhythm and management business Scott Olson said in the release.
Olson added that Boston Scientific is confident that adding Preventice’s combination of technology and expertise can contribute to rapid growth in “highly-attractive markets” while aiding the company’s core cardiac rhythm management and electrophysiology businesses.
The companies expect the acquisition to close by mid-2021 and plan for it to be immaterial to adjusted earnings per share in 2021, accretive by at least 1¢ in 2022 and increasingly accretive thereafter.
“We have been humbled to provide thousands of physician practices with services based on near real-time clinical data to enable the diagnosis and management of more than one million cardiac patients, without needing to interrupt their daily activities,” Preventice CEO Jon Otterstatter said. “Boston Scientific has been a key investor in Preventice for more than five years and we believe the company has the commercial reach, diagnostics expertise and operational infrastructure to bring these advanced monitoring technologies to more patients worldwide.”
Analysts from Truist list Boston Scientific as a “buy” and cited the acquisition as a “good transaction,” noting the belief that the extended-wear monitoring space will remain “one of the fastest growth sub-segments of cardiac monitoring,” becoming even more competitive over time.
“We remain confident that the overall market can grow in the double digits, allowing multiple companies, Boston [Scientific] included, to be very successful in this space,” the analysis said.

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