The announcement that Boston Scientific Corp. will pay $1.1 billion dollars for interventional neurology company Target Therapeutics Inc. raised more than a few eyebrows this past January. Admittedly, BSC can pay in a currency—BSC stock—that itself carries an extraordinarily high value. Still, the $1.1 billion is more than 10 times next year's projected sales for Target and more than 20 times this year's sales. Is this a great country or what?
But among the fraternity of small medical-device company CEOs in the San Francisco Bay area where Target is based, BSC's price is considered a fair value. Says one CEO, “You...