By Sriparna Roy
(Reuters) – Boston Scientific said on Tuesday it will buy Silk Road Medical Inc (NASDAQ:) in a $1.16 billion deal, adding medical devices used to prevent strokes.
Boston, which generates most of its revenue from sales of cardiac devices such as defibrillators and stents, will pay $27.50 for each Silk Road share held, representing a 27% premium to the stock's last closing.
Silk Road shares rose nearly 24% to $26.79 in pre-market trading.
Silk Road technology is used to prevent stroke in patients with carotid artery disease, a condition in which plaque builds up in the vessels that supply blood to the brain.
This minimally invasive procedure, called carotid artery revascularization (TCAR), temporarily reverses blood flow to divert accumulated plaque away from the brain. A stent is then placed at the site of the blockage to stabilize the plaque and prevent future stroke.
The deal comes on the heels of Boston's $3.7 billion acquisition 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 acquisition.
At least three analysts said the Silk Road deal was complementary to Boston's portfolio.
The Massachusetts-based company could help increase TCAR's reach within the United States, launch new products, and expand into new markets such as Japan and China, BTIG analyst Marie Thibault said.
Boston Scientific (NYSE:) expects to close the transaction in the second half of 2024, after which Silk Road will operate as a wholly owned unit. Silk Road expects net revenue of about $194 million to $198 million for this year.
Boston Scientific said the deal would not have any material impact on earnings per share for this year and 2025.