Boston Scientific to sell two businesses to private equity firm

14 December 2007

Boston Scientific Corporation (NYSE:BSX) is to sell its fluid management and venous access businesses to private equity firm Avista Capital Partners for $425 million.

The transaction is expected to close in the first quarter of 2008. Boston Scientific had previously announced its intent to sell these businesses as part of its plan to divest non-strategic assets.

In addition to the two sales announced yesterday, Boston Scientific has also recently announced agreements to sell its cardiac surgery, vascular surgery and auditory businesses.

Boston Scientific stock price fell by about 0.4 yesterday to 12.22, almost its lowest level for the year — this was 11.98 in November. The price was over 40 in June 2004 and has been on a general decline since.

Avista said that the combined businesses will operate as an independent company under a new name. Ron Sparks, an Avista healthcare industry advisor, will become Chairman and Chief Executive Officer of the new company. Dave McClellan, President of Boston Scientific's Oncology business, will become President of the new company.

The Fluid Management franchise, formerly North American Medical Instruments Corporation (NAMIC), produces a range of products used to manage fluid and measure pressure during angiography and angioplasty procedures. It employs approximately 750 people in its Glens Falls, New York, manufacturing facility.

The Venous Access franchise, whose products are also manufactured in Glens Falls, offers a leading portfolio of implantable devices designed to provide access to the blood stream for patients requiring intravenous antibiotics, nutrition, chemotherapy and blood sampling. The Venous Access franchise is part of Boston Scientific's oncology business, and employs approximately 150 people in locations around the United States.

Projected revenue for the two businesses in 2007 is approximately $170 million.

"We now have under agreement the divestitures of all five non-strategic businesses we had previously identified for sale," said Jim Tobin, President and Chief Executive Officer of Boston Scientific. "In addition, our expense and head count reduction initiative is well under way, and we continue to make progress monetizing our investment portfolio and restructuring several businesses. These measures should help us further our overall goals of restoring profitable growth, increasing shareholder value and continuing to strengthen Boston Scientific for the future."

Fluid Management/Venous Access will be Avista's fifth investment in the healthcare industry. In 2007, Avista made healthcare investments in BioReliance and VWR International and, in 2006, in Nycomed and MedServe.

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