Becton-Dickinson’s exciting acquisition

6 February 2018 (Last Updated February 6th, 2018 14:56)

Yet more mergers and acquisitions activity has taken place in the medical device space, with Becton Dickinson (BD) acquiring C. R. Bard in a deal worth $24bn.

Becton-Dickinson’s exciting acquisition

Yet more mergers and acquisitions activity has taken place in the medical device space, with Becton Dickinson (BD) acquiring C. R. Bard in a deal worth $24bn. The deal is expected to expand BD’s product portfolio in multiple high-growth areas and help the company grow its presence in markets outside the US. As 2017 saw a number of high-profile mergers and acquisitions in the medical device space, how does this partnership between Bard and BD strengthen the company’s position in the market?

BD’s main revenue generators have been its product portfolios within medication management and infection prevention. The combined revenues from medication management solutions and medication and procedural solutions contributed to almost 48% of the company’s overall revenue for 2017. The revenues from these product lines have been growing historically.

Unlike BD, Bard’s legacy is built on the development of interventional solutions, mainly for vascular, oncological, urological, and surgical purposes. These therapy areas also offer potential for high growth. Bard has enjoyed a leadership position in areas such as oncology and hernia repair thanks to its strong product offerings in these areas. With the acquisition of Bard, BD can now leverage a broader product portfolio, which will help it gain a stronger market position against bigger companies such as Medtronic and Johnson & Johnson in markets such as hernia repair and surgical interventions, and to solidify its position within the market for oncology devices.

Strong presence outside US

Another factor that is expected to play in favour of the partnership is the strong presence of Bard in markets outside the US. Over the last few years, Bard’s revenue from the Asia Pacific region has been consistently increasing as a percentage of the company’s overall revenue. In 2014, the region contributed to 10.7% of the overall revenue; that increased to 13.2% in 2016. Meanwhile, BD’s revenue from the region has been slowly declining from 15% in 2015 to 14.4% in 2017. Bard’s recent integration of Japan-based Medicon as a wholly-owned subsidiary has helped the company bolster its presence in the region. This will help create a win for BD in this market.

Bard has a rich pipeline of products that offer the potential for high growth, especially in areas such as cardiovascular and drug delivery devices. Combining this with BD’s expertise in medication management and infection control holds promise for positive long-term growth for the company.

As hospitals continue to face financial constraints and purchasing processes become increasingly streamlined, the partnership between BD and Bard will help the company position itself as one provider for a wide range of solutions to hospital needs.