Becton, Dickinson (BD) is set to buy C. R. Bard in a $24 billion deal, according to the two companies.
This brings together both medical device makers in an acquisition, approved by the board of directors of both companies, that is set to pay $317 for each Bard common share in cash and stock.
“Combining with Bard will accelerate our ability to offer more comprehensive, clinically relevant solutions to customers and patients around the globe, creating a strong partner for health care providers who are increasingly focused on delivering better outcomes at a lower total cost,” said Vince Forlenza, BD’s chairman and chief executive officer, in a statement, adding that expectations are for “the transaction to contribute meaningfully to BD’s plans for revenue growth and margin expansion, and generate outstanding value both near- and long-term for shareholders.”
The companies stated that the deal should combine BD’s medication management and infection prevention capabilities with Bard's existing portfolio and pipeline of new products.
“We also believe that we can expand our access to customers and patients through BD’s strategic selling capabilities, and that our fast-growing portfolio in emerging markets can significantly benefit from their well-established international commercial infrastructure,” said Tim Ring, Bard’s chairman and chief executive officer.
BD anticipated creating a “third segment within the company, to be called BD Interventional, to which the Bard business will report operationally and financially.
To that end, BD has also announced that Tom Polen, 43, now the executive vice president and president of the BD Medical Segment, will become president of BD, effective immediately. “In his new role, Mr. Polen will oversee BD’s Medical and Life Sciences segments, as well as the new Interventional segment,” the company said in a statement.
"Tom brings a deep understanding of BD, the medical technology industry and the global health care environment," said Forlenza. "His well-deserved promotion reflects his leadership in developing and implementing BD Medical's strategy and vision, his proven track record of delivering strong performance, and his commitment to ensuring the ongoing success of BD and its associates.”
The transaction is expected to improve BD’s gross margins by approximately 300 basis points in fiscal year 2018, boost BD’s earnings per share growth-trajectory to the mid-teens, and create strong cash flow, according to company projections.
It also advised that it anticipated cutting about $300 million in yearly costs, according to USA Today
The pair have about $16 billion in annual revenue and 65,000 employees worldwide, according to the newspaper.
John Weiland, Bard’s vice-chairman, president and chief operating officer, added that the two organizations are “highly compatible.”
New strategic opportunities include the ability to combine Bard’s strong “position and innovation pipeline in fast-growing vascular access segments – PICCs (peripherally inserted central catheters), midlines, and drug delivery ports – with BD’s leadership and innovation in IV drug preparation, dispensing, delivery and administration, the new company will be better positioned to provide end-to-end medication management solutions across the care continuum,” they stated.
In addition, the pairing should bolster efforts “to address 75 percent of the most costly and frequent health care-associated infections (HAIs).”
Combined solutions will provide a “more comprehensive, clinically relevant offering to address surgical site infections (SSIs) and catheter-related bloodstream infections (CRBSIs),” according to the companies.
Bard products will also grow BD’s focus beyond diabetes “to include peripheral vascular disease, urology, hernia and cancer.”
BD’s leading global capabilities and infrastructure will further accelerate the combined company’s growth outside of the U.S., according to the release. “Bard's strong presence in vascular access and surgery will also help drive sales of the highly complementary CareFusion portfolio outside of the U.S.,” they advised, adding that the larger company should have a bigger impact in emerging markets, notably to include $1 billion in annual revenue in China.
The is subject to customary closing conditions, regulatory and Bard shareholder approvals, and it is anticipated to close in late 2017.