Boston Scientific drops efforts to sell pain unit
Sources say bids too low
NEW YORK — Boston Scientific Corp. has halted efforts to sell its pain-management business after disagreements over the value of the unit, said four people familiar with the matter.
Boston Scientific, based in Natick, Mass., tried for several months to sell its neuromodulation business and was seeking from $1.5 billion to $2 billion for it, said the people, who declined to be named because the talks were private. Boston Scientific halted the process a few weeks ago and is unlikely to pursue a sale of the unit, one person said.
Johnson & Johnson, the world’s largest health products company, explored a purchase of the pain unit for a little more than $1 billion and decided not to proceed, said two of the people. Other interested parties were willing to pay from $1 billion to $1.5 billion, three people said.
Boston Scientific spent most of 2010 seeking buyers for the pain unit and its stroke-device business. Stryker Corp., the maker of artificial hips and knees based in Kalamazoo, Mich., agreed Oct. 28 to buy the stroke-device unit for about $1.5 billion. At the time, Boston Scientific anticipated completing the pain-management sale within a few weeks, said three people familiar with the matter. Bank of America Merrill Lynch advised Boston Scientific on both processes.
“As a matter of policy we don’t comment on speculation about acquisitions,’’ Bill Price, a spokesman for New Brunswick, N.J.-based Johnson & Johnson, said yesterday in a telephone interview. Paul Donovan, a spokesman for Boston Scientific, declined to comment in a telephone interview.
Ray Elliott, Boston Scientific chief executive officer, has moved to diversify the company’s product line, cut expenses, and refinance debt acquired in its 2006 purchase of Guidant Corp. Boston Scientific, the world’s second-largest maker of heart devices, has been dealing with slowing sales of cardiac stents and surgically implanted pacemakers and defibrillators that help treat heart rhythm disorders.
Boston Scientific shares fell 2 cents to $7.09 at 4 p.m. in New York Stock Exchange composite trading. J&J fell 5 cents to $61.86.
“It may simply mean that, if they did try and it didn’t work out, they reevaluated the strategic relevance of this to their business,’’ Joanne Wuensch, an analyst at BMO Capital Markets in New York, said in a telephone interview. “It may mean that they think they can turn around the business.’’