Boston Scientific has agreed to acquire EndoChoice for approximately $210 million in a deal that will see the latter folding into Boston Sci’s endoscopy business.
"The addition of EndoChoice products and services to our portfolio supports our strategy to provide comprehensive solutions to gastroenterology caregivers and the patients they serve," said Art Butcher, senior vice president and president of endoscopy at Boston Scientific, in a statement. "We expect the acquisition to expand our leadership into new categories in the endoscopy market, and to drive strong, continued growth of our endoscopy business."
EndoChoice, a gastrointestinal specialist, counts endoscopic imaging tools, diagnostics and infection control products among its offerings. This includes the Fuse Endoscopy System, which provides a 330-degree field of view, enabling clinicians to see nearly twice as much as a traditional endoscope would. The Fuse has been shown in clinical testing to detect 69% more precancerous polyps than standard, forward-viewing endoscopes.
The company raised $94.9 million in its IPO in June 2015, falling short of the $115 million it was hoping to raise toward the expanded commercialization of Fuse. And while its revenues have been steadily growing, from $1.3 million in 2008 to $34 million in 2012 and $72.3 million in 2015, the company has yet to post a profit, reporting net losses of $25.5 million, $52.7 million and $59.4 million for 2013, 2014 and 2015.
The transaction is expected to close in the fourth quarter and to be accretive to Boston Scientific’s adjusted earnings per share after 2017, according to the statement. The company plans to “evaluate strategic options” regarding the Fuse system, for which EndoChoice has ramped up marketing efforts in the past few years.
Boston Scientific has been on an acquisition spree, picking up radiofrequency ablation player Cosman Medical for an undisclosed amount this summer, acquiring CeloNova Biosciences’ interventional radiology business for $70 million up front last fall and snatching up endoscopic ultrasound company Xlumena earlier in that year. Also in 2015, it agreed to acquire Endo’s American Medical Systems urology unit for up to $1.65 billion, and in 2014, ponied up $415 million in cash for Bayer’s interventional division.