BY Richard Summerfield
US medical technology firm Becton Dickinson has agreed to acquire healthcare equipment manufacturer Bard in a cash and shares deal worth $24bn.
The deal, which is expected to close in the second half of 2017, will see Bard’s common shareholders receive around $222.93 in cash and 0.5077 shares of Becton Dickinson stock per Bard share held, or a total value of $317 per share, based on Becton’s closing price on 21 April, the last working day before the deal was announced. That price represents a 25 percent premium to the Bard share price at the end of last week. In total, Bard shareholders will own around 15 percent of the newly combined company. Becton will fund the deal by borrowing around $10bn, by selling about $4.5bn of equities and equity-linked securities to finance the cash component of the price and by issuing about $8bn in new equity for Bard’s shareholders.
In a statement, Vince Forlenza, Becton’s chairman and chief executive officer, said, “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 healthcare providers who are increasingly focused on delivering better outcomes at a lower total cost. Our two purpose-driven organisations are well-aligned strategically, sharing a strong track record of performance and a deep commitment to addressing unmet needs in today’s challenging healthcare environment. We expect 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 opportunity to expand Becton’s portfolio of brands was too good for the company to pass up, particularly in key foreign markets. Bard is one of the fastest-growing medical technology companies in emerging markets, and the combined company will have annual revenues of about $1bn in China.
Tim Ring, Bard’s chairman and chief executive, said, “We are confident that this combination will deliver meaningful benefits for customers and patients as we see opportunities to leverage BD’s leadership, especially in medication management and infection prevention. 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. Our two companies share the conviction that a product leadership strategy focused on unmet needs and improved outcomes that provide economic value to the global healthcare system will provide long-term shareholder returns.”