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Silk Road Medical delays merger with Boston Scientific

EditorLina Guerrero
Published 08/09/2024, 05:46 PM
SILK
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Sunnyvale, California-based Silk Road Medical Inc (NASDAQ:SILK), a company specializing in surgical and medical instruments, announced today that Boston Scientific Corporation (NYSE:NYSE:BSX) has voluntarily withdrawn and plans to refile its Premerger Notification and Report Form under the Hart-Scott-Rodino Act. This move is intended to provide the U.S. Federal Trade Commission (FTC) with additional time to review the proposed acquisition of Silk Road by Boston Scientific.

The original filing was made on July 10, 2024, and the withdrawal took effect today, with a refiling expected on Monday. The new 30-day waiting period will then begin, expiring on September 12, 2024, unless terminated earlier or extended.

Silk Road's statement provided caution regarding forward-looking statements, noting that the completion of the merger is not guaranteed and is subject to various conditions and approvals. Potential risks include the possibility that the merger may not be completed within the anticipated timeframe or at all, the failure to obtain necessary stockholder and regulatory approvals, and the impact of the merger's announcement on business operations.

In other recent news, Silk Road Medical has been a focal point in the investment community. The company has announced a definitive acquisition agreement with Boston Scientific Corporation, a transaction valued at $1.16 billion. This substantial merger is expected to finalize in the second half of 2024. Following this development, Stifel, an analyst firm, downgraded Silk Road Medical's status from Buy to Hold while raising the price target to $27.50, a direct response to the acquisition news.

In addition to the merger news, Silk Road Medical's shareholders have demonstrated confidence in the company's governance and executive compensation policies. At the recent Annual Meeting of Stockholders, all eight director nominees were elected to serve until 2025, and the advisory vote on executive compensation was approved. Furthermore, PricewaterhouseCoopers LLP was ratified as the company's independent registered public accounting firm for the year ending December 31, 2024.

In terms of financial performance, Silk Road Medical reported a 21% year-over-year increase in Q1 revenue to $48.5 million, despite a net loss of $14.1 million. The company's full-year 2024 revenue guidance projects revenues between $194 million and $198 million, indicating a year-over-year growth of 10% to 12%. These recent developments provide investors with a comprehensive understanding of Silk Road Medical's current business landscape.

InvestingPro Insights

As Silk Road Medical Inc (NASDAQ:SILK) navigates the complexities of its merger with Boston Scientific, investors are closely monitoring the company's financial health and market performance. According to InvestingPro data, Silk Road Medical has a market capitalization of $1.11 billion, with a notable revenue growth of 17.53% over the last twelve months as of Q2 2024. Despite this growth, the company is not currently profitable, with an operating income margin of -31.43% and a negative return on assets of -21.21%. These figures underscore the challenges Silk Road faces in achieving profitability, as also reflected by the analysts' consensus that the company will not be profitable this year.

InvestingPro Tips reveal that Silk Road's stock price has experienced significant volatility, with a substantial price increase of 62.04% over the last six months and currently trading near its 52-week high. The company's Price / Book ratio stands at 7.15, indicating a high valuation relative to its book value. While Silk Road operates with a moderate level of debt and has liquid assets exceeding short-term obligations, it is important to note that the company does not pay a dividend to shareholders.

Investors considering Silk Road Medical as part of their portfolio should be aware of the additional 11 InvestingPro Tips available, which provide deeper insights into the company's financials and market position. For more detailed analysis and tips, interested parties can visit https://www.investing.com/pro/SILK.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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