Earlier this morning, Koninklijke Philips NV (ADR) (NYSE:PHG) and Spectranetics Corp (NASDAQ:SPNC) announced entry into a definitive merger agreement, whereby PHG will acquire all issued and outstanding shares of SPNC for $38.50/share. The enterprise value of the deal totals ~$2.2 billion and represents a 27% premium to SPNC’s closing price yesterday.
Canaccord analyst Jason Mills commented, “Back in November, exiting our annual Med-Tech and Diagnostics Forum, we opined that SPNC represented a highly attractive takeout candidate, and would ultimately be scooped up by a major medical device maker prior to Halloween. Royal Philips fulfilled this prophesy, announcing today its intent to acquire SPNC. We view Stellarex as the coveted asset in the deal, with the DCB platform representing a “no compromise” solution, highlighted by best-in-class results in both less and more complex patient populations (European RCT and US pivotal data, respectively).”
Needham analyst Mike Matson added, “Philips previously acquired Volcano in early 2015 and we believe that SPNC’s product portfolio complements the Volcano vascular imaging (including intravascular ultrasound or IVUS and fractional flow reserve or FFR) and therapeutic product portfolio. We believe that the only area of direct overlap is atherectomy due to Volcano’s Phoenix atherectomy device but we believe its market share is very low and think regulatory issues are unlikely. Given the premium that Philips is paying and a short list of other potential buyers (see our comments below), we think another bidder is unlikely.”
Matson raises his price target on SPNC from $34.00 to $38.50, while reiterating a Buy rating.
Out of 8 analysts polled by TipRanks.com in the past 12 months, 7 rate Spectranetics stock a Buy, while 1 rates the stock a Hold.