By Nick Paul Taylor Contributor
- Boston Scientific has agreed to pay $230 million for an approximately 64% of its partner M.I.Tech, the South Korean manufacturer of endoscopic and urologic medical devices.
- M.I.Tech sells products such as the Hanarostent non-vascular, self-expanding metal stent, which Boston Scientific has distributed in Japan since 2015. Analysts at BTIG said the deal complements Boston Scientific’s non-vascular stent portfolio and boosts its international presence.
- The agreement is the first acquisition announced by Boston Scientific this year after a busy 2021 in which it bought five companies, including Baylis Medical Company for $1.75 billion and Lumenis’ surgical business for $1.07 billion.
Boston Scientific has established a clear playbook for M&A in recent years, with many of its acquisitions involving companies that it has invested in or worked with.
The M.I.Tech deal fits with the playbook. Boston Scientific has worked with the South Korean company for the past seven years. Having gained experience with the Hanarostent line through the Japanese distribution deal, Boston Scientific spotted a chance to help M.I.Tech grow through the expansion of its international footprint. The acquisition positions Boston Scientific to try to realize that opportunity.
Analysts at BTIG, Needham and RBC Capital Markets responded favorably to the deal, noting how it complements Boston Scientific’s existing assets.
“According to [Boston Scientific] management, the deal’s strategic rationale broadens [Boston Scientific’s] product portfolio in a high growth area, by adding clinically differentiated conformable stents with new features, sizes and designs, which are complementary to [Boston Scientific’s] existing endoscopy business,” RBC analysts wrote in an investor note. “[Boston Scientific] will look at options to bring its sales organization together in some geographies to more broadly and collaboratively sell M.I. Tech products.”
Boston Scientific’s acquisition is one of several this year after the medical device industry’s 2021 spending spree. Other deals so far in 2022 include Stryker’s $2.97 billion purchase of Vocera Communications, Becton Dickinson’s announced plan to buy Parata for $1.53 billion and ResMed’s plan to buy MediFox Dan for approximately $1 billion.
The pace of activity could change in the second half of the year. The RBC analysts noted that a clutch of companies including Abbott Laboratories, Johnson & Johnson, Medtronic and Stryker are actively seeking takeover targets and “have resources to allocate even as the current market environment is likely to drive some caution.”
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