Boston Scientific Saving Cash for Acquisitions, Capello Says
February 08, 2012, 12:32 PM ESTBy Michelle Fay Cortez
(Updates with closing stock price in the last paragraph.)
Feb. 2 (Bloomberg) -- Boston Scientific Corp. will reserve most of the $1 billion in free cash it expects to generate in 2012 for acquisitions, with plans to use 25 percent to buy back shares, Chief Financial Officer Jeff Capello said.
The company plans to purchase new technologies to help drive growth into the “mid-single digits,” Capello said on a conference call today with analysts. Boston Scientific, the second-biggest heart device manufacturer, reported today that net income plunged 55 percent to $107 million, or 7 cents a share, in the fourth-quarter as sales fell 7.7 percent.
Boston Scientific repurchased close to $500 million in stock during the second half of 2011, said Denise Kaigler, a spokeswoman for the Natick, Massachusetts-based company. This year, the device maker will use at least $250 million for buybacks. What it does with the remainder will depend on what technologies are available and their price, Capello said.
“I think you’re going to see us get a little bit more aggressive from the business development perspective to try to drive some new technologies into the business to drive the revenue growth,” he said. “We are anticipating that it may become a slightly better environment from the business development perspective, in terms of targets that are available that may not have been available historically.”
The company acquired Atritech Inc., a closely held maker of heart devices, in March. Atritech sells a device that is implanted in the heart to stop blood clots from triggering strokes in people with irregular heartbeats known as atrial fibrillation.
Boston Scientific declined 4.1 percent to $5.84 at the close in New York, the biggest single-day drop since Dec. 8. The device maker’s shares have fallen 15 percent in the past 12 months.
--Editors: Angela Zimm, Andrew Pollack
To contact the reporter on this story: Michelle Fay Cortez in Minneapolis at mcortez@bloomberg.net
To contact the editor responsible for this story: Reg Gale at Rgale5@bloomberg.net
