The Motley Fool Previous Page

Boston Scientific's Latest Purchase Is a Strong Buy

Dan Carroll
November 9, 2012

It's been a rough go lately for Boston Scientific (NYSE: BSX  ) , the medical device maker whose stock has fallen more than 9% over the last month. The company's most recent quarterly report offered up a big batch of weakness, with revenues missing expectations and declining year-over-year. Given that sort of bad news surrounding this company, you might think that now would be the absolute worst time to make a splash with an acquisition. As it turns out, Boston Scientific's latest purchase might be just what the doctor ordered.

The latest in hypertension
Boston Scientific is no stranger to acquisitions; the company has purchased 15 companies in the last five years. Not everything has gone exactly as planned -- Boston Scientific's top-selling businesses of interventional cardiology and cardiac rhythm management (CRM) have declined  while other, smaller divisions have yet to make up the lost revenues.

On Wednesday, however, Boston Scientific purchased hypertension device maker Vessix Vascular for up to $425 million. Out of that sum, $125 million will come up front, while the remaining possibility of $300 million more in milestone payments could add up through 2017.

Why's this important?
The Vessix acquisition gives Boston Scientific a quick route into the hypertension market with the V2 Renal Denervation System. This device for hard-to-treat hypertension has already been approved in Australia and Europe, and with the global market for hypertension expected to exceed $2 billion by 2020, it is vitally important for Boston Scientific to get a foot in the doo