Rubicon Medical Corp., a Salt Lake-based medical devices company, has set the wheels in motion for a possible $200 million purchase by Boston Scientific Corp.
Rubicon announced Thursday that Boston Scientific, based in Natick, Mass., has purchased 2 million shares of Rubicon common stock for $2 million. But the deal between the two companies could go far beyond that initial investment, according to Rubicon president and chief executive officer Rich Linder.
Linder, who founded the company with board chairman David Berger in 1996, said he is excited about the possibility of his company becoming part of Boston Scientific.
"The goal is to move toward a strategic acquisition by Boston Scientific," Linder said Thursday. "This is the first of several steps in the process."
The next step, he said, would be the signing of definitive agreements, hopefully within 90 days. After that, Boston Scientific would make another $15 million investment in Rubicon, giving it 18 percent of the company.
"Then the controlling stockholders, myself and the chairman of the board, have granted options to Boston Scientific to purchase our shares," Linder said. "Once that's done, they will offer to purchase the shares of all the remaining stockholders at at least prices that were consistent to prices given to the controlling stockholders."
That would mean a payment of $2 per share to all shareholders, he said.
Considering Rubicon has about 58.4 million diluted shares, that would put the value of the deal at close to $117 million. And if the company meets certain performance milestones, Boston Scientific would make an additional payment of $1.50 per share, making a total acquisition price of more than $200 million.
Linder said such a deal would be good for both Rubicon and Boston Scientific.
Rubicon's flagship product, he said, is the Rubicon Filter, an embolic protection device. It is used in coronary and carotid stenting procedures to treat blockages in blood vessels and reduce the risk of heart attacks and strokes.
Clinical investigation of the Rubicon Filter is about to begin in Europe and should start in the United States shortly, Linder said. The company anticipates regulatory approval in Europe near the end of this year.
"Boston Scientific was the first company to receive approval of an embolic filter in the United States," Linder said. "However, we truly have a breakthrough technology that we think will become the future of embolic protection.
"Boston Scientific wants to remain the leader in embolic protection."
Even if the company is acquired by Boston Scientific, he said, Rubicon's current management team will stay in place at least until the U.S. Food and Drug Administration approves the filter.
As manufacturing of the filter picks up, he said, Rubicon's employment in Salt Lake City could jump from about 20 people now to 75 to 100 people by the time FDA approval is secured.
Linder stressed that there are no guarantees that Boston Scientific will exercise its options or enter into further agreements with Rubicon.
"However, we have received an additional $2 million investment today, and we believe this is a positive development for Rubicon and its stockholders," he said.
And he remains confident about the possibilities.
"They are a large company with fantastic products and excellent distribution channels," he said. "I'm excited because they have the capability to really take this product to the next level, and they can do probably a much better job than we can with regard to distribution horsepower and marketing."
Shares of Boston Scientific, which employs about 14,000 people worldwide, closed down $1.04 at $56.66 Thursday on the New York Stock Exchange. Shares of Rubicon closed up 2 cents at 76 cents per share on the Over-the-Counter Bulletin Board. The Rubicon announcement was made after the close of trading Thursday.
E-mail: gkratz@desnews.com