Boston Scientific to Buy Preventice in Deal Worth Up to $1.225 Billion

Boston Scientific is looking to bolster its cardiac diagnostics and services offerings with its purchase of privately-held Preventice.
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Medical device maker Boston Scientific  (BSX) - Get Report announced that it has agreed to acquire Preventice Solutions, a privately-held company that offers a portfolio of mobile cardiac health services, for up to $1.225 billion. 

The deal features a cash payment of $925 million up front and an additional $300 mullion in a potential commercial milestone payment. Boston Scientific has been an investor in Preventice since 2015 and currently owns a 22% stake in the company.

"We are confident that by adding the broad technology portfolio and expertise of Preventice, our combined teams can continue to deliver rapid growth in these highly-attractive markets while also establishing an important adjacency to our core cardiac rhythm management and electrophysiology businesses," said Scott Olson, senior vice president and president for Rhythm Management at Boston Scientific. 

Boston Scientific shares were up 0.4% to $36.80 premarket Thursday. 

The Marlborough, Massachusetts-based firm estimates the cardiac diagnostics and services market to be nearly $2 billion currently, with annual growth expected to be in the double digit percentages. 

Preventice's portfolio includes a family of remote, wearable cardiac monitors for adult and pediatric patients. The monitors use a cloud-based platform that is supported by an independent diagnostic testing facility where data is reviewed by technicians and artificial intelligence algorithms. 

The acquisition is projected to close by the middle of 2021, but it will be immaterial to adjusted earnings per share this year, according to the company. Boston Scientific expects the acquisition to be accretive by at least one cent per share in 2022. 

"This acquisition will provide Boston Scientific with a foothold in the high-growth ambulatory electrocardiography space, which strongly complements our recent entrance into the implantable cardiac monitor market and will serve as an important component of our category leadership strategy in cardiac diagnostics and services," Olson said.