Boston Scientific has agreed to acquire Silk Road Medical for around $1.26bn, adding the US-based carotid artery device specialist to its roster.
Boston Scientific will pay $27.50 in cash per share of Silk Road, around a 38% premium to the latter’s volume-weighted average share price in the past 60 days. The deal represents a premium of 27% to the stock at the last market close.
The transaction, which is expected to close in the second half of 2024, will see Silk Road become a wholly owned subsidiary of the medtech giant.
Shares in Silk Road opened 19% higher after the announcement compared with the previous market close.
Silk Road, which has a market capitalisation of $854.7m, is known for its Transcarotid Artery Revascularisation (TCAR) devices. TCAR is a minimally invasive procedure to treat carotid artery disease. The procedure works by temporarily reversing blood flow to prevent plaque fragments from reaching the brain. To date, the company says it has completed more than 85,000 TCAR procedures.
GlobalData medical analyst David Beauchamp said: "Boston Scientific’s acquisition of Silk Road Medical will strengthen their market share in both North America and Europe, and will preserve the momentum they currently have in their cardiology division."
"Boston Scientific has experienced very high year-over-year growth in their cardiology division and in overall revenue since 2021. The acquisition of Silk Road Medical will expand its cardiology portfolio to TCAR devices, contributing to its continued growth once the deal is finalised."
Silk Road’s product line consists of its ENROUTE range, including a neuroprotective system, stent system and balloon dilatation catheter, among others. The TCAR system gained US Food and Drug Administration (FDA) approval in 2015.
The company has a 9.4% share in the global carotid and renal artery stent market, according to analysis by GlobalData.
GlobalData medical analyst Joselia Carlos said: "TCAR currently makes up about 10% of carotid artery stenosis treatment procedures and was developed by Silk Road Medical, who is currently the only player in the TCAR space. In comparison to more invasive treatment options for carotid stenosis such as carotid endarterectomy and transfemoral stenting, TCAR is associated with reduced stroke risk, cranial nerve injury, and hospital length of stay."
Silk Road reported strong earnings in fiscal year (FY) 2023, posting revenue of $177.1m – up 28% from FY2022. The company stated that increased TCAR adoption primarily drove the sales boost.
Carlos added: "Due to its minimally invasive nature, TCAR procedures have become an increasingly popular treatment for carotid stenosis, experiencing an aggressive compound annual growth rate of 13% between 2015 and 2024."
Boston Scientific’s president of vascular peripheral interventions, Cat Jennings, said in a statement: "The TCAR platform developed by Silk Road Medical is a notable advancement in the field of vascular medicine, which has revolutionised stroke prevention and the treatment of carotid artery disease.”
This is the second major acquisition announcement made by Boston Scientific this year, after it agreed to buy urinary and bowel dysfunction device specialist Axonics for $3.7bn in January. The deal is still in the works after the Federal Trade Commission asked the companies for additional information.
