Boston is forced to finish what it started with Channel

The fact that one of a company’s former executives is a crook is no excuse for refusing to buy it, Boston Scientific was told yesterday. In 2017 the company agreed to buy the 80% of Channel Medsystems it did not already own for $275m – a move in line with Boston’s stated intention of buying companies in which it had previously invested. The agreement was based on Channel’s endometrial ablation system gaining FDA approval by October 2019. By May 2018, though, Boston cancelled the deal after Channel informed it that Dinesh Shankar, Channel’s vice-president of quality assurance, had embezzled $3m from his employer. Mr Shankar was convicted and jailed this February, but the condition on which the acquisition rested was met, with the FDA approval this March of Cerene, a therapy for heavy menstrual bleeding. And yesterday the Delaware Court of Chancery ruled that Boston had to go ahead with the deal, saying that though Shankar’s fraud had rendered some of Channel’s statements to Boston inaccurate, Boston had failed to show that this would be expected to have a material adverse effect. Below is a look at some of the companies in which Boston has more recently invested, and hence, possibly, its future M&A targets.