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Medical firm amends buyout terms

August 10, 2007|From the Associated Press

Boston Scientific Corp. on Thursday said it had amended terms of its 2004 acquisition of a maker of implantable electronic medical devices, a deal that led the acquired firm's founder to sue over Boston Scientific's attempts to fire him.

The agreement reduces the potential payout Boston Scientific faces in its acquisition of Advanced Bionics Corp. and would end all litigation between Boston Scientific and former Advanced Bionics shareholders, including founder Alfred Mann, Boston Scientific said.

Under the pact, Boston Scientific would retain the California-based unit's pain management business.

Principal shareholders of Advanced Bionics would pay $150 million to buy back two businesses from Boston Scientific. One makes electronic devices to restore the hearing of deaf people, the other is a program to develop products to pump drugs within the body.

The transactions, expected to close in January, are subject to regulatory approval as well as approval by former shareholders of Valencia-based Advanced Bionics who are entitled to receive payments under the original merger agreement.

The company has been under pressure to raise cash to pay off debt. Its stock recently hit a five-year low due to recent downturns in its key heart device markets and investor concerns over debt from last year's $27-billion acquisition of Guidant Corp.

Under the 2004 acquisition, Boston Scientific agreed to give Mann shared control of his company after it became a subsidiary. But Mann sued in federal court last year, accusing Boston Scientific of plotting to violate the agreement and trying to force him out. A judge granted an injunction to keep Mann in his position, and Boston Scientific appealed that ruling in May.

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