Boston Scientific Completes Sale of Neurovascular Business
Company prepays $600 million of debt
NATICK, Mass., Jan. 3, 2011 - Boston Scientific Corporation (NYSE: BSX) today announced that it has completed the sale of its Neurovascular business to Stryker Corporation. The sale price is $1.5 billion, of which $1.45 billion was received at closing (including an upfront payment of $1.376 billion, a $50 million milestone payment associated with the commercialization of the next-generation Target(TM) Detachable Coils, and $24 million which will be placed into escrow to be released upon the completion of local closings in certain foreign jurisdictions). The remaining $50 million will be payable upon the transfer or separation of certain manufacturing facilities. The sale follows the definitive agreement announced on October 28, 2010.
The Company plans to record a pre-tax gain associated with the sale of its Neurovascular business in excess of $500 million in the first quarter of 2011, excluding any impact of the receipt of future milestone payments. Total after-tax proceeds, assuming the achievement of these milestones, are expected to be approximately $1.2 billion. Boston Scientific expects 2011 earnings per share, excluding the impact of the gain on the sale, to be diluted by approximately four to six cents on both a GAAP and adjusted basis.
The Company also announced that on December 31, 2010 it prepaid all $600 million of its 6.00 percent senior notes due June 15, 2011, using cash on hand. The Company plans to record a pre-tax charge, not included in previous guidance, of approximately $15 million (approximately $9 million after tax, or $0.01 per share) in the fourth quarter of 2010 representing accelerated interest expense associated with the prepayment.
"The sale of our Neurovascular business and the prepayment of $600 million of debt significantly strengthen our financial flexibility and enhance our capacity to fund acquisitions and other investments that advance our strategy of realigning our portfolio through the execution of our Priority Growth Initiatives," said Ray Elliott, President and Chief Executive Officer of Boston Scientific. "In addition, this substantial debt prepayment highlights our continuing strong cash flow, commitment to debt reduction and progress in achieving our capital structure goals."
About Boston Scientific
Boston Scientific is a worldwide developer, manufacturer and marketer of medical devices whose products are used in a broad range of interventional medical specialties. For more information, please visit: www.bostonscientific.com.
About Stryker
Stryker is one of the world's leading medical technology companies and is dedicated to helping healthcare professionals perform their jobs more efficiently while enhancing patient care. The Company provides innovative orthopedic implants as well as state-of-the-art medical and surgical equipment to help people lead more active and more satisfying lives. For more information about Stryker, please visit: www.stryker.com.
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