BD to Acquire Edwards Lifesciences Critical Care Product Group for $4.2 Billion

BD

Medical technology company Becton, Dickinson, and Company (BD) announced that it will acquire Edwards Lifesciences’ Critical Care Product Group for $4.2 billion in cash. According to a press release,¹ BD acquired the advanced monitoring solutions company in order to expand its own smart connected care solutions.

The acquisition is expected to close by the end of 2024. In order to fund it, BD will use about $1 billion of its own cash and take on $3.2 billion of new debt. Within a year to a year-and-a-half from closing, BD plans on significantly reducing its debt load by deploying free cash flows towards repayment.

In a press release, BD president, CEO, and chairman Tom Polen said, “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. 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.”

He continued, “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 serves patients across the globe with its AI-powered technology, which is used in more than 10,000 hospitals. Its equipment and software are used to monitor the cardiovascular condition of critically ill patients, along with hemodynamic monitoring and medication management. The company has 4,500 employees and brought in $900 million in revenue in 2023.

In early May, BD announced its second quarter financial results for fiscal year 2024.² Revenue increased 4.6% for a total of $5 billion, and its cash increased $785 million in continuing operations and over $900 million in free cash flow.

In a press release issued at the time, Polen said, “Second quarter performance reflects our strategy in action and the strength of our diverse portfolio. Our focus on BD Excellence and execution enabled strong operating margin and cash flow within the quarter. We enter the back half of fiscal 2024 with continued momentum giving us the confidence to again raise our fiscal 2024 earnings guidance as we deliver on our BD 2025 commitments."

BD has also recently made moves to expand its presence in the cancer screening field. In May, the company announced that FDA had approved the use of self-collected samples for HPV testing, opening up the ability for women to obtain samples in non-traditional settings, such as retail pharmacies and mobile clinics.³

In a press release issued at the time, BD’s vice president of global medical affairs for diagnostic solutions Dr. Jeff Andrews, said, “Many patients are uncomfortable with the intimate nature of a pelvic exam. Also, many people live in areas without a local doctor or clinician trained to obtain a sample with a speculum. The option to self-collect in a clinical setting can help women overcome some of these barriers."

Sources

1. BD to Acquire Edwards Lifesciences' Critical Care Product Group for $4.2 Billion to Expand Smart Connected Care Solutions and Become an Advanced Monitoring Technology Leader. BD. June 3, 2024. Accessed June 4, 2024. https://news.bd.com/2024-06-03-BD-to-Acquire-Edwards-Lifesciences-Critical-Care-Product-Group-for-4-2-Billion-to-Expand-Smart-Connected-Care-Solutions-and-Become-an-Advanced-Monitoring-Technology-Leader
2. BD Reports Second Quarter Fiscal 2024 Financial Results. BD. ay 2, 2024. Accessed June 4, 2024. https://www.prnewswire.com/news-releases/bd-reports-second-quarter-fiscal-2024-financial-results-302133749.html
3. Women in U.S. Can Now Collect Their Own Sample for Cervical Cancer Screening. BD. ay 15, 2024. Accessed June 4, 2024. https://www.prnewswire.com/news-releases/women-in-us-can-now-collect-their-own-sample-for-cervical-cancer-screening-302145620.html