Two of the largest suppliers in the healthcare industry in the world will become one as Becton, Dickinson & Co has agreed to acquire C.R. Bard Inc. at a price of $24 billion, which will create a huge powerhouse offering its customers things from infection prevention technology to syringes.
Becton agreed to a price of $317 per share to acquire Bard in a cash and stock deal equal to approximately a premium of 25% over the April 21 closing price for Bard, said the two companies in a prepared statement.
The boards at both companies unanimously approved the transaction, said the joint statement.
Medical supply companies, which supply doctors and hospitals, have come under increased pressure to consolidate operations to bring down prices. That has led to a number of deals in the industry.
With portfolios that are larger, they can offer doctors, purchasing groups and hospitals better package deals for products that customers have demanded as they merge themselves into centralized operations.
The scale of both companies will make Becton a partner for healthcare providers and hospitals that is indispensable and provides it with a big advantage during the long term, said an analyst in Europe to his clients.
Bard specializes in devices that are minimally invasive like ports and catheters for those who have end-stage renal disease, irregular heartbeats and arteries that are clogged. Becton says that will complement the offerings it already has in its intravenous medication delivery systems.
The two companies combined will offer products as well that will address 75% of the most frequent and costly healthcare associated infections, said the joint statement by the companies.
Bard is also adding to Becton’s scale for its expanding categories such as surgery and oncology and expand offerings it has in areas like urology, hernia care and vascular disease.
The combined scale of the two will increase its international presence as well as opportunities. Together they will over $1 billion in revenue annually in China. Close to $300 million in annual synergies are expected prior to taxes by the fiscal year 2020, the two said.
Bard posted sales during its first quarter of $938.7 million, said the company. Vascular products represented $256.6 million of the total, while urology brought in over $237.7 million and oncology $255.5 million.
Revenues at Becton were $12.5 billion during its fiscal year that ended September 30.