Waters Corporation, a global provider of analytical instruments and software serving biotechnology, pharmaceutical, and clinical laboratories, is repositioning its growth profile through the acquisition of Becton Dickinson’s (BD) Biosciences and Diagnostic Solutions business.
The deal meaningfully expands Waters’ exposure to biologics, diagnostics, and regulated laboratory workflows while adding a substantial base of recurring revenue.
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At the JP Morgan Healthcare Conference on 12 January, Waters detailed the strategic rationale, synergy opportunities, and expected long-term financial impact, arguing the combination can drive above-market growth and margin expansion over the coming years.
BD’s biosciences and diagnostic solutions unit is a ~$3.3bn business that generated roughly 5% annual growth from 2019 to 2024. The revenue profile is notably durable: about 80% is recurring, supported by a large installed base and ongoing demand for consumables, reagents, and service. The business is also geographically diversified, with approximately 50% of revenue from the Americas, ~30% from Europe, and ~20% from Asia-Pacific/China.
For Waters, the acquisition accelerates a shift toward faster-growing, more defensible end markets while complementing its core strengths in analytical science. It also strengthens Waters’ diagnostics strategy. Waters’ LC-MS diagnostics business (~$265m in annual revenue) has been growing in the high-single digits to low-double digits but has faced limits in commercial scale. BD’s global commercial, service, regulatory, and automation infrastructure is expected to expand Waters’ reach and accelerate growth in areas such as therapeutic drug monitoring, endocrinology, and other clinical applications.
Waters expects approximately $200m of cost synergies within three years of closing, with potential to exceed $300m based on comparable historical integrations. Identified synergies include manufacturing and supply chain efficiencies, commercial and service optimisation, and savings across R&D and SG&A, with meaningful benefits beginning as early as 2026.
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By GlobalDataRevenue synergies are expected from three main levers: commercial execution, expansion into higher-growth adjacencies, and cross-selling. High-growth adjacencies are expected to generate about $150m of incremental revenue by year five, driven by opportunities such as flow cytometry in regulated labs, enhanced bioseparations offerings, and faster LC-MS diagnostics adoption. Cross-selling is particularly relevant given BD’s strength in academic, government, biotech, and drug discovery accounts where Waters has historically had less penetration.
Overall, the transaction shifts Waters from a primarily mid-single-digit growth mix toward a portfolio more weighted to low double-digit and double-digit growth areas. Financially, Waters is targeting roughly 7% revenue CAGR over the next five years, approximately 500 basis points of margin expansion, and strong EPS growth.
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