Devices & Diagnostics

5 takeaways from Becton Dickinson’s $24B acquisition of C.R. Bard (Updated)

One reason for the deal is Bard will help expand BD’s focus on the treatment of disease states beyond diabetes.

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This post has been updated to include information from a conference call with analysts about the deal.

Another week, another ginormous medical device deal. This time it is Becton Dickinson which has acquired C.R. Bard in a $24 billion deal to extend its product footprint in the latest of many medical device acquisitions that are reshaping the manufacturing landscape.

In a conference call with analysts, Bard CEO Tim Ring said the talks with BD CEO and Chairman Vince Forlenza began shortly after the start of the year.

“Vince asked me to go to go to lunch and it turned out to be a very expensive lunch.”

The deal is expected to close sometime in the fall. Here are a few items to keep in mind with this deal.

Expansion of disease states Bard will expand BD’s focus on the treatment of disease states beyond diabetes to include peripheral vascular disease, urology, hernia and cancer, the company press release said.

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A boost to BD’s hospital acquired infection capabilities The acquisition will also expand BD’s leadership in infection prevention. It gives BD the ability to address the majority of the most costly and frequent hospital-acquired infections. BD will also have a more comprehensive, clinically relevant offering to address Surgical Site Infections and Catheter-Related Blood Stream Infections, the release noted.

Hospital partner factor Medical device companies have been under the gun to consolidate as the face increased pricing pressure from hospitals. Evercore IS analyst Vijay Kumar, cited by Bloomberg, said the deal would make BD an indispensable partner to hospitals. Asked by an analyst how BD’s hospital counterparts responded to the news, Forlenza said the deal will provide tools to help hospitals shift to population-based healthcare and value-based healthcare.

“We had our biggest U.S. customer in last week and we walked them through the strategy. [They] need better clinical outcomes at lower costs that are standardized.”

BD’s strategy The deal drew a lot of comparisons to BD’s acquisition of CareFusion for $12.2 billion in 2015. The CareFusion deal gave BD medication management and patient safety solutions, reflecting the trend by medical device companies to provide value-added services to complement their products. BD later off-loaded the respiratory business acquired in the deal through a joint venture with private equity firm to create Vyaire Medical. The business consolidated BD’s respiratory business lines, providing respiratory diagnostics, ventilation, patient monitoring and anesthesia.

Forlenza and others noted a few times on the call with analysts that the company gathered insights from its work to integrate CareFusion that will make the Bard integration easier.

As part of the integration, the president of BD’s medical segment, Tom Polen, has been named the president of BD. His new role involves overseeing BD’s Medical and Life Sciences segments, and a new Interventional segment.

Deal perspective So far, the BD-C.R. Bard acquisition marks the second biggest healthcare deal of the year after Johnson & Johnson’s $30 billion acquisition of Actelion, known mostly for its drugs to treat pulmonary arterial hypertension.


Photo: crazydiva, Getty Images