According to Reuters, Stryker Corporation SYK is likely to take over Boston Scientific Corporation BSX, creating a market value of more than $110 billion.If the deal materializes, the combined entity will have one of the MedTech’s broadest spectrums of product offerings that include cardiology, orthopaedics, surgical supplies and neuroscience. Yesterday, shares of Stryker dropped 5.1% and Boston Scientific’s shares increased 7.4%.
How Likely is the Deal to Materialize?
The chances of the deal are uncertain because there are no confirmatory statements or press releases from the company representatives.In fact, investors should never forget about Stryker’s highly-rumored acquisition plans of Smith & Nephew from 2015, which never materialized.On the brighter side, this is not the first time Stryker has been tied up with Boston Scientific. Stryker acquired Boston Scientific’s neurovascular unit in 2010 for $1.5 billion, which indicates probability of a second collaboration now.However, reaching any particular conclusions at this moment might be a bit too early.
How Would Stryker Benefit?
If the deal happens, Stryker will gain control of Boston Scientific’s line of heart devices such as stents, defibrillators and Watchman device to prevent blood clots. Boston Scientific achieved clinical milestones for Ranger Drug Coated Balloon and WATCHMAN Left Atrial Appendage Closure device.Further, the company will also leverage on Boston Scientific’s solid foothold in the underpenetrated emerging economies. The company also registered double-digit growth on a year-over-year basis in the emerging markets in the last reported quarter. If the deal materializes, Stryker might profit from Boston Scientific’s strength, especially in the BRIC nations.
Stryker’s Acquisition Profile Shines Bright
Stryker has been following an acquisition-driven strategy to boost growth. Recently, the company acquired Entellus Medical, Inc in an all cash transaction for $24 per share or an equity value of approximately $662 million.Stryker also acquired VEXIM for €183 million. VEXIM specializes in the development and sale of vertebral compression fracture solutions for.In 2017, Stryker completed the acquisition of NOVADAQ for a net purchase price of $674 million. NOVADAQ is a leading developer of SPY fluorescence imaging technology that provides surgeons with visualization of blood flow and perfusion with more than250 clinical studies and array of specialties. The company’s product portfolio is highly complementary to Stryker’s visualization platform.