Silk Road Medical Acquired by Boston Scientific, Shares Soar 24% From Investing.com
Boston Scientific (NYSE:) acquires Silk Road Medical (NASDAQ:) for $1.16 billion.
The deal, disclosed Tuesday, will see Boston Scientific pay $27.50 per share of Silk Road, a 27% premium to the stock’s last closing price.
SILK shares have surged more than 24% since the market opened on Tuesday.
Silk Road Medical develops technology focused on preventing stroke in patients with carotid artery disease, a condition where plaque builds up in the blood vessels that supply blood to the brain.
The acquisition follows Boston Scientific’s $3.7 billion acquisition of Axonics, a company known for devices that improve bladder function.
Boston Scientific expects to close the Silk Road transaction in the second half of 2024, after which Silk Road Medical will become a wholly-owned subsidiary. Silk Road’s net revenue this year is expected to be between $194 million and $198 million.
Despite the acquisition, Boston Scientific does not expect a material impact to its earnings per share in 2024 and 2025.
“We expect SILK to grow across the entire BSX portfolio last year with double-digit revenue growth (+28% y/y) and gross margins of ~72%,” analysts at BTIG wrote in a note following the announcement.
“We believe BSX will be able to leverage its resources to increase TCAR penetration in the U.S., launch new products, and expand into new markets, including Japan and China, while continuing to improve business margins. “I think so,” he added.
Elsewhere, analysts at Stifel said they see the deal as positive for both companies.
“Silk Road helps expand the BSX Peripheral Interventions portfolio, and for SILK, Boston’s significant financial and marketing resources can help take TCAR adoption to the next level,” they said.
