EndoChoice Holdings Inc (NYSE:GI) soared on news that Boston Scientific is acquiring the medical device company for approximately $210 million in cash, or $8.00 a share, that’s nearly a 90% premium from where shares closed on Monday. The transaction is expected to close in the fourth quarter of 2016 subject to customary closing conditions.
“The addition of EndoChoice products and services to our portfolio supports our strategy to provide comprehensive solutions to gastroenterology caregivers and the patients they serve,” said Art Butcher, senior vice president and president, Boston Scientific, endoscopy. “We expect the acquisition to expand our leadership into new categories in the endoscopy market, and to drive strong, continued growth of our endoscopy business.”
Mark Gilreath, founder and chief executive officer, EndoChoice, said, “The combination of our broad portfolio of products and services for the gastroenterology physician, with the complementary products and large global infrastructure of the Boston Scientific endoscopy business, creates an enhanced growth platform for both businesses, and delivers immediate value for our shareholders.”
The acquisition is expected to be breakeven to Boston Scientific adjusted earnings per share in 2017, and accretive thereafter. The transaction is expected to be less accretive (or dilutive, as the case may be) on a GAAP basis, due to amortization expense and transaction and integration costs.
EndoChoice generated approximately $75 million of total sales in the twelve month period ended June 30, 2016. The EndoChoice imaging portfolio includes the Full Spectrum Endoscopy (FUSE®) colonoscope, which enables doctors to better see anatomy and find more lesions during colonoscopies. With respect to the FUSE colonoscope, Boston Scientific intends to evaluate strategic options, and expects to provide further clarity at or around the time of transaction closing. (Original Source)
On the ratings front, William Blair analyst Margaret Kaczor downgraded GI to Hold, in a report issued on August 4.According to TipRanks.com, Kaczor has a yearly average return of 11.5%, a 67% success rate, and is ranked #745 out of 4183 analysts.
EndoChoice Holdings, Inc. engages in the design and commercialization of products and services for gastrointestinal (GI) caregivers. The company was founded by Mark Gilreath and William Parks in 2012 and is headquartered in Alpharetta, GA.