No More Neurovascular for Boston Scientific

Boston Scientific has said goodbye to its neurovascular business. The Natick, Mass.-based medical device company will sell the business to Kalamazoo, Mich.-based Stryker for $1.5 billion in cash. The deal is expected to close before the end of the year, according to the companies.

Boston Scientific said it plans to use about half of the $1.2 billion in after-tax proceeds of the sale for acquisitions and the remainder for retiring debt. Stryker has agreed to pay Boston Scientific $1.4 billion for the business at the closing of the deal and the remaining $100 million after the closing based on certain milestones, including the commercial launch of the business’s new Target detachable coils for treating hemorrhagic stroke.

Boston Scientific’s neurovascular business, which employs 1,150 people, is based in Fremont, Calif., and has revenue of $348 million last year. The company first acquired the business in 1997 through its purchase of Target Therapeutics. That deal was valued at $1.1 billion.

Mark Paul, the current president of Boston Scientific’s neurovascular business, will continue to lead the unit after the acquisition closes. The business is a leading provider of medical technologies such as detachable coils, stents, and guidewires used in the treatment of neurovascular diseases.

“The sale of our neurovascular business is part of our overall strategic plan that will refocus our portfolio to, amongst other criteria, leverage existing sales forces with least invasive, cost and comparatively effective medical devices that reduce or eliminate refractory drug regimens,” said Ray Elliott, Boston Scientific’s president and CEO, in a press release.

In addition Stryker Corp. also purchased bio-implantable products maker Porex Surgical Inc. for an undisclosed amount the day after it announced the Boston Scientific deal. According to Stryker officials, the cranial implant maker’s assets will complement its existing craniomaxillofacial product offering.

Porex Surgical develops bio-implantable porous polyethylene products for use in reconstructive surgery of the head and face. Its parent company, Porex Corp., based in Fairburn, Ga., manufactures porous plastic products for a variety of industries. Porex is owned by Los Angeles, Calif.-based investment firm Aurora Capital Group.