Waters acquires Becton Dickinson's Biosciences and Diagnostics business unit
As reported by genomeweb, my highlights inline, and see my strategic positioning section at the bottom:
Waters and Becton Dickinson announced Monday that Waters is acquiring BD's Biosciences and Diagnostics Solutions business in a transaction valued at roughly $17.5 billion.
Terms of the deal call for a reverse Morris trust, under which BD's Bioscience and Diagnostics business will be spun off tax-free to shareholders and then simultaneously merged with Waters. Following closure of the deal, BD's shareholders will own 39.2 percent of the combined company, and Waters' shareholders will own the remaining 60.8 percent. Waters also will assume $4 billion of debt.
The deal doubles Waters' TAM to roughly $40 billion while fitting with its existing strategies of focusing on regulated applications and recurring revenue, Waters President and CEO Udit Batra said during a conference call held Monday morning to discuss the deal.
Batra said the deal, which is expected to close around the end of the first quarter of 2026, is expected to generate pro forma revenue of approximately $6.5 billion in 2025. He said that following the transaction, Waters expects mid-to-high single-digit revenue growth and mid-teens adjusted earnings-per-share growth through 2030.
Batra added that the combined company, which will remain headquartered in Milford, Massachusetts, will employ roughly 16,000 people.
BD announced in February that its board of directors had authorized it to separate its Biosciences and Diagnostics Solutions business from the rest of the company to maximize shareholder value. BD said at that time that it aimed to complete that separation by the end of 2026. The decision stemmed from a portfolio review the company launched in 2024.
BD's decision to divest its Biosciences and Diagnostics business stems from a focus on simplification, and concentrating on its core medical technologies. Waters, meanwhile, will expand into clinical diagnostics and biologics, doubling its total addressable market (TAM) and creating new cross-selling opportunities. The merged portfolio will be uniquely positioned to serve both regulated QC applications and diagnostic markets, offering everything from LC-MS for drug development to flow cytometry and PCR for cell-based analysis.
Batra highlighted a number of benefits that Waters anticipates from the deal. The company expects acquisition of BD's expertise in the biologics market will help Waters apply its chemistry and separations expertise to that market. Additionally, it expects its expertise in high-volume bioanalytical characterization applications will allow it to move BD's flow cytometry and PCR technologies into large molecule AQ/QC applications. Waters also expects BD's experience in clinical and diagnostic settings will help Waters develop its diagnostics business, including mass spectrometry-based diagnostics. Batra said the company plans to spend roughly 10 percent of sales on R&D.
Batra also said that Waters believes it can boost growth within the Biosciences and Diagnostics Solutions business by applying to BD's installed base of more than 70,000 instruments its business practices aimed at driving instrument replacement and service plan sales.
The deal "unlocks immediate commercial impact by enabling us to apply our proven execution playbook at greater scale," he said.
In a note to investors, Jefferies analyst Tycho Peterson said the bank viewed the deal favorably, noting that it expands Waters' TAM while maintaining "an attractive margin profile." He said, however, that in the short term the deal "adds potential integration risk and more moving pieces" to what had been a "fairly simple LCMS replacement cycle story and high [return on invested capital] profile that was attractive to many."
In Monday morning trading on the New York Stock Exchange, Waters shares were down 13 percent to $308.14. BD shares were down less than 1 percent to $174.72.