Boston Scientific to Acquire Silk Road Medical, Shares Surge 24%
Boston Scientific is set to acquire Silk Road Medical for a whopping $1.16 billion. The purchase price will be $27.50 per share, providing a 27% premium over Silk Road Medical's last closing stock price.
This news caused Silk Road Medical shares to surge over 24% following the market open. The company specializes in developing technology to prevent strokes in patients suffering from carotid artery disease.
Previous Acquisitions and Future Plans
This acquisition comes on the heels of Boston Scientific's $3.7 billion purchase of Axonics. The Silk Road Medical acquisition is expected to be finalized in the second half of 2024, making Silk Road Medical a wholly-owned subsidiary of Boston Scientific.
Despite the acquisition, Boston Scientific doesn't anticipate any significant impact on its per-share profit for 2024 and 2025.
Financial Projections and Analyst Insights
Silk Road Medical projects its net revenue for this year to be between $194 million and $198 million. BTIG analysts noted, “We expect Silk Road Medical to be accretive to the overall Boston Scientific portfolio, with double-digit revenue growth and approximately 72% gross margin last year.”
They further added, “Boston Scientific can use its resources to increase transcarotid artery revascularization (TCAR) penetration within the U.S., launch new products, and expand into new markets, including Japan and China, while continuing to improve business margins.”
Positive Reception from Analysts
Stifel analysts also see the deal as beneficial for both companies. “Silk Road Medical helps expand the Boston Scientific Peripheral Interventions portfolio. For Silk Road Medical, Boston’s significant financial and marketing resources can help drive TCAR to the next level of adoption,” they noted.
In summary, this acquisition aligns with Boston Scientific's strategic goals to grow and diversify its portfolio while leveraging its extensive resources and capabilities.
