The Medical Device sector isn’t seeing a flood of deals, but the dollars are adding up fast. In the first four months of 2017, dollars committed to deals in this sector have reached 60% of 2016’s total of $61.6 billion. With just 31 deals announced, deal volume stands at 27% of last year’s total of 112 transactions.
Four deals have surpassed the $1 billion mark this year, and one currently accounts for 65% of this year’s $36.9 billion total. That deal, recently announced, is Becton, Dickinson and Company’s (NYSE: BDX) $24 billion purchase of C.R. Bard, Inc. (NYSE: BCR).
In late April, Becton, Dickinson (BD) announced it would pay $317.00 per share for the New Jersey-based medical device maker. The share price breaks down to $222.93 in cash and 0.5077 shares of BD stock per Bard common share, with multiples of 6.5x revenue and 20.x EBITDA.
Bard designs, manufactures, packages, distributes, and sells medical, surgical, diagnostic and patient care devices worldwide. It specializes in vascular, urology, oncology and surgical specialty products.
Its product portfolio and pipeline boost BD’s growth opportunities in non-U.S. markets, and will expand the acquirer’s focus on the treatment of disease states beyond diabetes, to include peripheral vascular disease, urology, hernia and cancer. BD expects to create a third segment, BD Interventional, where the Bard businesses will report both operationally and financially.
Also this month, BD completed its purchase of the remaining 60% of Israeli-based Caesarea Medical Electronics (CME) that it did not already own. That deal expanded BD’s infusion portfolio to include ambulatory, home and specialty acute care infusion pumps. Terms were not disclosed, but sources estimated deal value to be around $250 million.
The deal will be immediately accretive and is expected to generate high-single digit accretion to adjusted EPS in fiscal year 2019. Approximately $300 million of annual, pre-tax, run-rate cost synergies are expected by fiscal year 2020. BD also expects to benefit from revenue synergies in FY 2019.
