Axonics acquired by Boston Scientific: fairness opinion by J.P. Morgan
Deal terms
Implied value per share by method vs. $71.00 offer
Ranges as disclosed in the banker’s summary of analyses; the red line marks the per-share consideration.
Opinion of J.P. Morgan to the target board
Discounted cash flow assumptions
Discounted to present value as of December 31, 2023; adjusted for estimated 2023 year-end cash and present value of net operating losses and other tax assets. Perpetual growth rate based on guidance provided by Axonics management.
Selected public companies (9)
Insulet Corporation · Penumbra Inc. · Shockwave Medical, Inc. · Inspire Medical Systems Inc. · Inari Medical Inc. · Irhythm Technologies Inc. · Alphatec Holdings Inc. · Vericel Corp. · Paragon 28, Inc.
| Multiple | Peer low | Peer median | Peer high | Range applied | Implied per share |
|---|---|---|---|---|---|
| FV / 2024E Revenue | — | — | — | 4.3x–8.3x | $44.00–$77.50 |
Selected precedent transactions (10)
| Date | Target | Acquirer | Multiple |
|---|---|---|---|
| 2023-07 | Kerecis LLC | Coloplast AS | — |
| 2021-10 | Baylis Medical Company Inc. | Boston Scientific Corporation | — |
| 2021-08 | Intersect ENT, Inc. | Medtronic PLC | — |
| 2021-03 | Lumenis Ltd. | Boston Scientific Corporation | — |
| 2020-11 | BioTelemetry, Inc. | Koninklijke Philips N.V. | — |
| 2018-08 | K2M Group Holdings, Inc. | Stryker Corp | — |
| 2017-06 | The Spectranetics Corporation | Koninklijke Philips N.V. | — |
| 2017-02 | ZELTIQ Aesthetics, Inc | Allergan plc | — |
| 2016-06 | LDR Holding Corporation | Zimmer Biomet Holdings, Inc. | — |
| 2013-04 | Conceptus, Inc. | Bayer HealthCare LLC | — |
| Multiple | Low | Median | High | Range applied | Implied per share |
|---|---|---|---|---|---|
| FV / LTM Revenue | — | — | — | 4.9x–10.8x | $41.50–$83.25 |
| FV / NTM Revenue | — | — | — | 4.3x–8.8x | $44.00–$81.75 |
Other analyses
| Analysis | Summary | Implied per share |
|---|---|---|
| 52-Week Historical Trading Range | 52-week range of closing prices for period ending January 5, 2024; reference only, not a component of fairness analysis. | $47.99–$67.34 |
| Analyst Price Targets | Fourteen publicly available equity research analyst price targets as of January 5, 2024 ranged $55.00-$79.00; discounted back to December 31, 2023 at an 11% cost of equity gave $49.50-$71.25. Reference only. | $49.50–$71.25 |
| Present Value of Future Share Price Analysis | Implied future share prices as of December 2024, 2025 and 2026 using forward firm value on NTM revenue and 30-day average revenue multiples, discounted to December 31, 2023 at 11% cost of equity: $61.95 (Dec 2024), $65.99 (Dec 2025), $69.12 (Dec 2026). Reference only. | $61.95–$69.12 |
Approximately $40.4 million total; $3.0 million payable upon delivery of opinion, remainder contingent on consummation. Break-up fee equal to 15% of any payment received by Axonics following termination, capped at $40.4 million. Aggregate fees recognized by J.P. Morgan in prior two years: $0 from Axonics, approximately $2.2 million from Boston Scientific.
Management projections
| Projection year | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | CAGR |
|---|---|---|---|---|---|---|
| Revenue | $442M | $530M | $623M | $717M | $824M | 16.8% |
| Revenue growth | 20.8% | 19.9% | 17.5% | 15.1% | 14.9% | |
| EBITDA | $72.0M | $80.0M | $124M | $173M | $238M | 34.8% |
| EBITDA growth | 44.0% | 11.1% | 55.0% | 39.5% | 37.6% | |
| EBITDA margin | 16% | 15% | 20% | 24% | 29% | |
| Implied EV / EBITDA | 47.2x | 42.5x | 27.4x | 19.7x | 14.3x |
Year-1 growth is against LTM at announcement ($366M revenue, $50.0M EBITDA); later years are year over year.
Axonics management prepared standalone, non-public Forecasts for fiscal years 2023E through 2028E, which the Board directed J.P. Morgan to use. Revenue grows from $366 million in 2023E to $824 million in 2028E, with gross profit of $271 million (74.8% margin) rising to $635 million (77.0% margin) and Adjusted EBITDA from $50 million to $238 million. Unlevered free cash flow (calculated by J.P. Morgan from the Forecasts and approved by management) moves from $(22) million in 2023E to $104 million in 2028E.
Process notes
Other Medical Devices and Supplies fairness opinions
- Silk Road Medical / Boston Scientific 2024
- Surmodics / GTCR 2024 · 36.9x EV/EBITDA
- Atrion / Nordson 2024 · 19.1x EV/EBITDA
- Shockwave Medical / Johnson & Johnson 2024 · 58.5x EV/EBITDA
- Hologic / Blackstone / TPG 2025 · 14.1x EV/EBITDA
- ZimVie / ARCHIMED 2025 · 10.8x EV/EBITDA
All Medical Devices and Supplies opinions → · J.P. Morgan opinions