C.R. Bard Acquired by Becton Dickinson for $24 Billion

The medical instruments sector should be strong today, after $BDX announced plans to acquire rival $BCR. The market cap for Beckton is about twice that of BCR. However, with the takeout price of $317, appreciably higher from Friday’s close, the company is taking on a lot here. Making a $24b acquisition with a market cap of $39b is aggressive and should lead to shares trading lower for the acquirer.

Becton Dickinson and Co (BDX) and C. R. Bard (BCR) announced a definitive agreement under which BD will acquire Bard for $317.00 per Bard common share in cash and stock, for a total consideration of $24 billion. The agreement has been unanimously approved by the Boards of Directors of both companies.

Under the terms of the transaction, Bard common shareholders will be entitled to receive approximately $222.93 in cash and 0.5077 shares of BD stock per Bard share, or a total of value of $317.00 per Bard common share based on BD’s closing price on April 21. At closing, Bard shareholders will own ~15% of the combined company.

BD expects to contribute ~$1.7 billion of available cash to fund the transaction, along with, subject to market conditions, approximately $10 billion of new debt and ~$4.5 billion of equity and equity linked securities issued to the market.

Bard shareholders will also receive $8 billion of BD common stock. BD has also obtained fully committed bridge financing. At closing, BD estimates the combined company will have pro forma leverage of ~4.7x and is committed to deleveraging to below 3.0x leverage within three years of closing.

BD expects to continue the suspension of its share repurchase program. BD is also committed to annual dividend increases while reinvesting in the business to continue to drive long-term growth.
Immediately accretive to BDX and expected to generate high single-digit accretion to Adjusted EPS in FY19

BD expects to create a third segment within the company — BD Interventional — where the Bard businesses will report both operationally and financially. BD is separately announcing the appointment of Tom Polen, currently executive vice president and president of the BD Medical Segment, as president of BD, effective immediately.

Other stocks that might move on this news, include: $SNN, $BSX, $BAX, $XRAY and $MTD.