Boston Scientific (NYSE:) is acquiring Silk Road Medical (NASDAQ:) for $1.16 billion.
Under the deal, announced Tuesday, Boston Scientific will pay $27.50 per Silk Road share, 27% above the stock’s last closing price.
SILK shares rose more than 24% after the market opened on Tuesday.
Silk Road Medical is developing technology aimed at preventing strokes in patients with carotid artery disease, which involves a buildup of plaque in the vessels that supply blood to the brain.
The acquisition follows Boston Scientific’s $3.7 billion purchase of Axonics, known for its devices that improve bladder function.
Boston Scientific expects to complete the Silk Road transaction in the second half of 2024, at which point Silk Road Medical will become a wholly owned subsidiary. Silk Road forecasts net revenue this year to be between $194 million and $198 million.
Despite the acquisition, Boston Scientific does not expect a material impact on earnings per share in 2024 and 2025.
“We expect SILK to grow within the overall BSX portfolio with double-digit revenue growth (+28% YoY) and ~72% gross margin last year,” BTIG analysts said in a note following the announcement.
“We believe BSX can leverage its resources to increase transcarotid artery revascularization (TCAR) penetration in the US, launch new products and enter new markets, including Japan and China, while continuing to improve the profitability of the business,” they added.
Stifel analysts said they view the deal as positive for both companies.
“Silk Road helps expand BSX’s portfolio of peripheral interventions, and for SILK, Boston’s significant financial and marketing resources can help take TCAR to the next level of implementation,” they noted.