Boston Scientific to Buy Pfizer’s Catheter Business

Boston Scientific Corp., a medical device maker and aggressive buyer of medical technology companies, said Tuesday that it has agreed to acquire the Schneider Worldwide unit of drug giant Pfizer Inc. for $2.1 billion in cash.

The acquisition would give Boston Scientific new products and bolster its expected entry this summer into the booming market for stents, small wire-mesh tubes that support weak blood vessels in the heart.

By combining its stent with Schneider’s catheter technology, Boston Scientific will mount a formidable challenge to other stent makers, industry analysts said.

“From a strategic standpoint, it creates a very powerful interventional medical technologies company,” said John Calcagnini, industry analyst at CIBC Oppenheimer.

The news sent Boston Scientific’s stock up $1.75 to close at $62.75 on the New York Stock Exchange. Pfizer added $1.75 to $109.75, also on the Big Board.

Switzerland-based Schneider, with sales of $330 million last year, was put up for sale by Pfizer, the No. 5 U.S. drug maker, in February. New York-based Pfizer is also divesting its Howmedica orthopedics unit and its American Medical Systems unit.

Boston Scientific, based in Natick, outside Boston, is paying a rich price for Schneider, one that was probably too high for Arterial Vascular Engineering Inc., the other party interested in the Pfizer unit, analysts said.

The Schneider deal leaves Arterial Vascular fewer options in broadening its business beyond stents, analysts said.

It also sets up Boston Scientific and Guidant Corp. as the dominant competitors in stents, raising questions for other companies such as Medtronic Inc. and Johnson & Johnson, the analysts said.

Buying Schneider technologies will hurt Boston Scientific’s profit in the short run. The company is projecting earnings of about $2.47 a share on sales of $3.2 billion next year in combination with Schneider; without Schneider, earnings would be about $2.60 a share on sales of $2.7 billion, said Larry Best, Boston Scientific’s chief financial officer.

“We believe this transaction will be accretive beginning in the year 2000 and in subsequent years,” Best added.

The deal, subject to approval by regulators, is expected to close in the fourth quarter.