Sriparna Roy
(Reuters) -Boston Scientific will buy Silk Road Medical (NASDAQ:) for $1.16 billion, the company said on Tuesday, adding medical devices used to prevent stroke.
Boston, which makes most of its revenue from sales of cardiac devices such as pacemakers and stents, will pay $27.50 for each Silk Road share it owns, representing a 27% premium to the stock’s last closing price.
Silk Road shares rose nearly 24% to $26.79 in premarket trading.
Silk Road’s technology is being used to prevent stroke in patients with carotid artery disease, a condition in which plaque builds up in the vessels supplying blood to the brain.
A minimally invasive procedure called transcarotid artery revascularization (TCAR) temporarily changes blood flow to move accumulated plaque away from the brain. A stent is then placed at the site of the blockage to stabilize the plaque and prevent future strokes.
The deal follows Boston’s $3.7 billion buyout of Axonics, which gave it access to devices used to improve bladder function. In April, the US Federal Trade Commission requested additional information regarding the buyback.
At least three analysts said the Silk Road deal complements Boston’s portfolio.
The Massachusetts-based company could help increase TCAR’s U.S. penetration, launch new products and expand into new markets such as Japan and China, said BTIG analyst Marie Thibault.
Boston Scientific (NYSE:) expects to complete the transaction in the second half of 2024, after which Silk Road will operate as a wholly-owned subsidiary. Silk Road forecasts net revenue this year to be between $194 million and $198 million.
The deal will not have a material impact on earnings per share this year or in 2025, according to Boston Scientific.