Becton Dickinson aims to grow by bringing new technologies into more places across the spectrum of healthcare. Pharmacies are now part of that plan. The medical technologies giant is acquiring pharmacy automation firm Parata Systems in a $1.525 billion deal.
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According to terms announced Monday, BD is paying cash to buy Parata, which has commercialized robotic systems that sort and package pills, automating many of the repetitive and manual work of pharmacists. Founded in 2001, the Durham, North Carolina-based company markets its technology as a way to free pharmacists to do other tasks, make pharmacies more efficient, and reduce prescription errors. According to BD, Parata’s revenue for the 12 months ended March 31 was about $220 million.
Parata is a portfolio company of investment firm Frazier Healthcare Partners, which got into pharmacy technologies in 2017 with the acquisition of Wisconsin-based pharmacy packaging and automation company TCGRx. The following year, TCGRx acquired Parata and the combined company kept the Parata name and Durham headquarters. Financial terms of both deals were not disclosed.
BD made its name making and selling diabetes products. Earlier this year, it completed the spinoff of that business as a separate, publicly traded company now named Embecta. BD has been pursuing a growth strategy it calls “BD 2025,” which is focused on adding technologies that are either part of connected care or enable care to be delivered in new settings, such as the home. In addition to internal R&D, the medical technologies giant plans tuck-in acquisitions that bring to its portfolio assets that fit its growth strategy.
“Parata has a highly attractive financial profile and compelling value proposition that meets all of our rigorous investment criteria on growth, profitability and returns,” Tom Polen, BD’s chairman, CEO, and president said in a prepared statement. “With the addition of Parata, BD further advances our 2025 growth strategy around smart, connected care and enabling new care settings.”
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The Parata acquisition is BD’s biggest since it bought surgical products company C.R. Bard in 2017 for $24 billion. In a research note sent to investors on Monday, William Blair analyst Brian Weinstein wrote that the Parata acquisition gives BD access to a $600 million pharmacy automation market that is growing amid staffing shortages, wage inflation, and the increased demands facing pharmacists. He added that the deal fits his firm’s expectations for what BD should be doing and is consistent with its stated 2025 growth strategy. As part of BD, Parata’s offerings can outpace market growth through the larger company’s commercial footprint, global scale, and innovation capabilities.
The deal still needs regulatory clearances but the companies expect to complete the transaction by the end of the first half of BD’s 2023 fiscal year, which would be the end of March 2023.
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