Boston Scientific closes acquisition of the American Medical Systems Male Urology Portfolio
Aug 04, 2015
Boston Scientific Corporation (NYSE: BSX) has closed on the previously announced agreement with Endo International plc (NASDAQ: ENDP) (TSX: ENL) to purchase the American Medical Systems (AMS) Men’s Health and Prostate Health businesses, for $1.6 billion in up-front cash and a potential additional $50 million milestone based on 2016 sales. The acquisition positions Boston Scientific as a leader in urology, providing physicians and healthcare systems a comprehensive portfolio of proven technologies.
The transaction includes AMS’ leading products for treating urologic conditions, including the minimally invasive GreenLight XPS™ and HPS™ Laser Therapy Systems for treating benign prostatic hyperplasia, the AMS 800™ Urinary Control System for treating male incontinence and the AMS 700™ Inflatable Penile Prosthesis for treating erectile dysfunction. These technologies complement the Boston Scientific leading urology portfolio for the treatment of kidney stones and pelvic floor disorders, enabling further innovation for the company across five common urologic diseases that account for 50 percent of all urologic surgical procedures.1 The AMS women's health business is not part of the transaction.
The AMS Men’s Health and Prostate Health businesses will be combined with the Boston Scientific Urology and Women’s Health businesses. The joint businesses will become the Boston Scientific Urology and Pelvic Health business. The business unit also is continuing to invest in gynecologic surgical solutions for the treatment of abnormal uterine bleeding and uterine fibroids.
“This is an exciting day as we join forces and welcome the AMS Men’s Health and Prostate Health teams to Boston Scientific,” said Karen Prange, senior vice president and president of Urology and Pelvic Health at Boston Scientific Corporation. “Together, we create a business with nearly $1 billion in annual sales, strong future growth prospects through innovation and market expansion, and a significant opportunity to address unmet medical needs. As a category leader, our combined organization will bring value-driven innovations that can help healthcare providers advance patient outcomes, reduce procedure costs, enhance quality and evolve the treatment of urologic and pelvic conditions in ways that previously could not be realized by either company alone.”
As previously disclosed, the acquisition is expected to result in annual pre-tax synergies in excess of $50 million by the end of 2018. On an adjusted basis, the transaction is expected to be breakeven to adjusted earnings per share in 2015, accretive by at least 3 cents in 2016, approximately 7 cents in 2017 and increasingly accretive thereafter. The transaction is expected to be less accretive (or dilutive, as the case may be) on a GAAP basis 2015 through 2017, due to amortization expense and transaction and integration costs.
About Boston Scientific
Boston Scientific transforms lives through innovative medical solutions that improve the health of patients around the world. As a global medical technology leader for more than 35 years, we advance science for life by providing a broad range of high performance solutions that address unmet patient needs and reduce the cost of healthcare. For more information, visit www.bostonscientific.eu.
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Use of Non-GAAP Financial Measures
To supplement our consolidated financial statements presented on a GAAP basis, we disclose certain non-GAAP financial measures including adjusted earnings per share. Adjusted earnings per share excludes goodwill and intangible asset impairment charges; acquisition-, divestiture-, litigation- and restructuring-related charges and credits; certain discrete tax items and amortization expense. Non-GAAP measures such as adjusted earnings per share are not in accordance with generally accepted accounting principles in the United States. The GAAP financial measure most directly comparable to adjusted earnings per share is GAAP earnings per share. The difference between our estimated impact of the acquisition on our GAAP and adjusted earnings per share relates to amortization expense on acquired intangible assets and acquisition-related net charges, which primarily include exit costs and other fees. These amounts are excluded by the Company for purposes of measuring adjusted earnings per share.
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