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OUTREACH
Return
on Restlessness
PLUS: Video of alumnus Peter Nicholas
PLUS: Two Professors + Two Graduate Students = Fortuitous Start
Faces of Wharton Entrepreneurship
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Bridge
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Is There a Robot in Your Future? Helen Greiner Thinks So
Return on Restlessness
Boston Scientific Founder Peter Nicholas' Pursuit of Entrepreneurial Acquisitions.
When Johnson & Johnson
lowered its takeover bid for Guidant, Pete Nicholas sensed an opening
to swoop in and do a deal of his own. His instinct paid off handsomely.
In January, his company, Boston
Scientific, announced that it was buying
Guidant in a transaction valued at $27 billion — or $80 a share.
The deal might have never happened had Johnson & Johnson not battered Guidant in the press, says Nicholas, Boston Scientific's chairman and co-founder. Nicholas, a 1968 Wharton MBA graduate visited Wharton Entrepreneurial Programs this past spring as an Entrepreneur in Residence.
"Guidant had some problems, and J&J chose to react to that by punishing the company," says Nicholas. "There was a lot of public commentary that was inappropriate in my view. It demoralized the organization and made them and their board open to an offer from another company. You don't take organizations down publicly. People in organizations are proud. They don't think of themselves as bad people. They may have made mistakes. But they work hard, and they care a lot."
Boston Scientific's acquisition of Guidant is the biggest, boldest deal ever for a company that has long shown that entrepreneurship can be as much about doing savvy deals — knowing which companies to acquire and what price to pay — as it is about creating gee-whiz technological breakthroughs, though Boston Scientific has had plenty of those, too. Risk taking, after all, isn't limited to quitting college and building computers in your parents' garage.
Johnson & Johnson and Boston Scientific's fight for Guidant was
the sort of corporate brawl that the media love, and they portrayed it as
a blood
feud between Nicholas and Johnson & Johnson's chief executive,
William Weldon. Nicholas calls that picture a bunch of baloney.
Sure, he says, the two companies are rivals — they vie head-to-head in the lucrative market for cardiac stents, which are used to open clogged coronary arteries. But Boston Scientific is buying Guidant to beef up its product line, not to gratify the boss' ego. "A lot of people think that Weldon and Nicholas are archenemies and that I think he's a Darth Vader," Nicholas says. "That has a certain cachet among the op-ed types, but it's simply not true. J&J is a terrific company and has been a healthcare leader for decades and decades. They have built an amazing enterprise and I have always admired that."
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Wharton Entrepreneurial Programs