- Combination unlocks new future value-creation
opportunities and is expected to be immediately accretive to BD
revenue growth, adjusted gross margin, adjusted operating margin
and adjusted EPS
- Expands BD's portfolio of smart connected care solutions
with complementary and broad set of leading monitoring
technologies, advanced AI-enabled clinical decision tools and
robust innovation pipeline
- Critical Care to operate as a separate business unit
within BD's Medical segment, based in Irvine, Calif. and led by Katie Szyman
FRANKLIN LAKES, N.J.,
June 3,
2024 /PRNewswire/ -- BD (Becton, Dickinson and
Company) (NYSE: BDX), a leading global medical technology company,
and Edwards Lifesciences (NYSE: EW), today announced a definitive
agreement under which BD will acquire Edwards' Critical Care
product group ("Critical Care"), a global leader in advanced
monitoring solutions, for $4.2
billion in cash, unlocking new value creation opportunities
and enhancing BD's portfolio of smart connected care solutions.
Critical Care is a high-growth, innovative industry leader in
advanced patient monitoring with advanced AI algorithms serving
millions of patients globally. Critical Care invented the
hemodynamic monitoring category, and its solutions are currently
used in more than 10,000 hospitals globally to better understand
the cardiovascular condition in real-time for critically ill
patients, which helps improve outcomes. Hemodynamic monitoring and
medication management technologies are often used simultaneously in
the operating room or intensive care units, creating longer-term
opportunities for meaningful innovation and interoperability across
the care continuum. Critical Care has approximately 4,500 employees
with most based in Irvine,
California. In 2023, the business generated more than
$900 million in revenue.
"Critical Care expands BD's portfolio of smart connected care
solutions with its growing set of leading monitoring technologies,
advanced AI-enabled clinical decision tools and robust innovation
pipeline that complement BD's existing technologies serving
operating rooms and intensive care units," said Tom Polen, chairman, chief executive officer and
president of BD. "We believe the combination unlocks multiple new
avenues for growth and value creation through BD's broad global
footprint, increased penetration across new and existing hospital
customers, new innovation opportunities across data sets and
platforms, and application of the BD Excellence operating system.
The transaction is expected to be immediately accretive to all key
financial measures with a strong return profile, which underscores
our continued commitment to generate sustained shareholder value.
Critical Care is well aligned to BD's core innovation and business
strategies, is a strong cultural fit and we look forward to
welcoming Katie and Critical Care's talented team to BD."
Critical Care's portfolio includes the gold-standard Swan Ganz
pulmonary artery catheter, minimally invasive sensors, noninvasive
cuffs, tissue oximetry sensors and monitors. Its smart technologies
are driven by advanced data analytics with machine learning and
AI-based predictive and prescriptive algorithms to help clinicians
better understand current and future patient conditions and provide
clinical decision support tools.
Transaction Highlights
Under the terms of the transaction, BD will acquire Critical
Care for $4.2 billion in cash.
The transaction meets all of BD's rigorous investment criteria
on growth, profitability and returns. It is expected to be
immediately accretive to all key financial measures, including BD's
revenue growth, adjusted gross and operating margins, and adjusted
earnings per share. Critical Care's long-term financial profile is
also expected to deliver durable revenue growth of approximately 6%
to 7%, with year-one adjusted gross margin of at least 60% and
adjusted operating margins of at least 25% that increase over time.
Consistent with the company's BD2025 strategy, growth-enhancing and
value-creating tuck-in M&A continues to be a key part of BD's
targeted financial profile.
Additional margin expansion and value is expected to be
generated from moderate synergies, primarily from cost of goods
sold, supply chain efficiencies, and general and administrative
expenses through BD Excellence operating system principles, while
preserving Critical Care's commercial and innovation resources.
BD expects to fund the all-cash transaction with approximately
$1 billion of cash and $3.2 billion of new debt. At closing, BD is
expected to have net leverage of approximately 3x and expects to
de-lever to its 2.5x long-term net leverage target within 12 to 18
months of closing, primarily by deploying its free cash flows to
debt repayment.
The transaction is expected to close before the end of the
calendar year and is subject to customary regulatory reviews and
closing conditions.
A slide presentation regarding the transaction is available on
the News & Events page of BD's investor website at
https://investors.bd.com/news-events.
Governance and Structure
Upon closing, Critical Care will operate as a separate business
unit within BD's Medical segment to align with its smart connected
care approach, and it will maintain its presence in Irvine, Calif. Katie
Szyman, who has served as corporate vice president of
Critical Care since 2015, will lead the new business unit within
BD, reporting to Mike Garrison,
executive vice president and president of the BD Medical
segment.
Advisers
Perella Weinberg Partners and Citi are acting as financial
advisers, and Ropes & Gray, LLP is providing legal counsel to
BD.
About BD
BD is one of the largest global medical
technology companies in the world and is advancing the world of
health by improving medical discovery, diagnostics and the delivery
of care. The company supports the heroes on the frontlines of
health care by developing innovative technology, services and
solutions that help advance both clinical therapy for patients and
clinical process for health care providers. BD and its more than
70,000 employees have a passion and commitment to help enhance the
safety and efficiency of clinicians' care delivery process, enable
laboratory scientists to accurately detect disease and advance
researchers' capabilities to develop the next generation of
diagnostics and therapeutics. BD has a presence in virtually every
country and partners with organizations around the world to address
some of the most challenging global health issues. By working in
close collaboration with customers, BD can help enhance outcomes,
lower costs, increase efficiencies, improve safety and expand
access to health care. For more information on BD, please visit
bd.com or connect with us on LinkedIn at
www.linkedin.com/company/bd1/, X (formerly Twitter) @BDandCo or
Instagram @becton_dickinson.
NON-GAAP FINANCIAL MEASURES
This presentation includes
forward-looking non-GAAP financial measures. BD does not attempt to
provide reconciliations of forward-looking non-GAAP financial
measures to the comparable GAAP measure because the impact and
timing of these measures are inherently uncertain and difficult to
predict and are unavailable without unreasonable efforts. In
addition, BD believes such reconciliations would imply a degree of
precision and certainty that could be confusing to investors. Such
items could have a substantial impact on GAAP measures of BD's
financial performance.
FORWARD LOOKING STATEMENTS
This press release contains
certain estimates and other forward-looking statements (as defined
under Federal securities laws). Forward looking statements
generally are accompanied by words such as "will", "expect", or
similar words, phrases or expressions. These forward-looking
statements include statements regarding the estimated or
anticipated future results of BD and anticipated benefits of the
proposed acquisition of Critical Care, the expected timing of
completion of the transaction, future growth in Critical Care's
relevant market segments, and other statements that are not
historical facts. These statements are based on the current
expectations of BD management and are subject to a number of risks
and uncertainties regarding Critical Care's business and the
proposed acquisition, and actual results may differ materially from
any anticipated results described, implied or projected in any
forward-looking statement. These risks and uncertainties include,
but are not limited to, the ability of the parties to successfully
close the proposed acquisition, including the risk that the
required regulatory approvals are not obtained, are delayed or are
subject to unanticipated conditions that could adversely affect the
combined company or the expected benefits of the transaction; risks
relating to the integration of Critical Care operations, products
and employees into BD and the time and resources required to do so
and the possibility that the anticipated synergies and other
benefits of the proposed acquisition will not be realized or will
not be realized within the expected timeframe; the loss of key
senior management or other associates; competitive factors,
including the development of new technologies by other companies
and pricing and market share pressures; changes in healthcare or
other governmental regulation; risks relating to the ability to
maintain favorable supplier arrangements and relationships; changes
in regional, national or foreign economic conditions, as well as
other factors discussed in BD's filings with the Securities
Exchange Commission. BD does not intend to update any
forward-looking statements to reflect events or circumstances after
the date hereof, except as required by applicable laws or
regulations.
Contacts:
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Media:
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Investors:
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Troy
Kirkpatrick
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Adam Reiffe
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VP, Public
Relations
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Sr. Director, Investor
Relations
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858.617.2361
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201.847.6927
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troy.kirkpatrick@bd.com
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adam.reiffe@bd.com
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SOURCE BD (Becton, Dickinson and Company)