BD today announced its board of directors has unanimously authorized BD management to pursue a plan to separate BD's Biosciences and Diagnostic Solutions business from the rest of BD.
The separation decision was the result of a business portfolio evaluation launched by BD in early 2024.
Following the separation, New BD will be a pure-play medical technology company. With this profile, New BD expects to drive concentrated investments in R&D and capital allocation including growth accretive M&A, which positions the company to deliver differentiated and durable growth rates in MedTech. New BD will have positions across four new operating segments in end-markets with significant headroom for growth:
- Medical Essentials, which includes BD's Medication Delivery Solutions and Specimen Management businesses that manufacture tens of billions of devices each year and represent the backbone of health care delivery through products such as IV catheters, PICCS, flush and other essential vascular access and management solutions, blood collection solutions, syringes and advanced needle technologies, resulting in durable, recurring revenue and strong cash generation.
- Connected Care, which includes BD's Medication Management Solutions and Advanced Patient Monitoring businesses with millions of smart devices that use automation, artificial intelligence and analytics to improve the efficiency and effectiveness of patient care and creates compelling growth potential in new areas of health care such as pharmacy automation.
- BioPharma Systems will bring a new name and increased focus to the Pharmaceuticals Systems business unit, which is the global leader in biologic drug delivery, developing and manufacturing drug delivery devices for the pharmaceutical industry. BioPharma Systems is uniquely positioned to enable the transition to more biologics, including GLP-1 treatments, and capitalize on the large growth potential of pharmaceutical industry trends, as more drug launches rely on patient self-injection.
- Interventional, which includes BD's Urology & Critical Care, Peripheral Intervention and Surgery businesses that advance the treatment of high-burden chronic conditions such as urinary incontinence, peripheral vascular disease, cancer and hernias – all of which are high-growth categories with attractive margin profiles and meaningful headroom for new innovation.
The Biosciences and Diagnostic Solutions business is also expected to benefit from enhanced focus and investments as a pure-play Life Sciences Tools and Diagnostics leader. The business is expected to have approximately $3.4 billion in fiscal 2024 revenue with a $22+ billion addressable market growing at mid- to high-single-digits, with more than 80% recurring revenue, and approximately 30% adjusted EBITDA margins. Biosciences is a leader in immunology and cancer research solutions and related clinical diagnostics, including flow cytometry instruments and reagents, and has innovative single-cell multiomics tools. Diagnostic Solutions is a leader in microbiology and infectious disease diagnostics, including molecular diagnostics, cervical cancer screening, microbiology automation and point-of-care offerings. Both businesses have strong leadership teams with unparalleled commercial, engineering and R&D expertise, and are dedicated to bringing the next generation of high-quality innovations to researchers, clinicians and patients. The company believes that independent of BD, the business will be well-positioned to better meet the needs of research and laboratory customers and accelerate growth through more focused investment and capital allocation within the life sciences sector, potentially resulting in enhanced value for shareholders.
BD's board of directors is committed to exploring all opportunities to execute the separation in a manner that maximizes shareholder value, including possible options such as a Reverse Morris Trust, sale, spin-off or other transaction. The company expects to announce more specifics on the separation plans by the end of fiscal 2025 and intends to target completion of the transaction in fiscal 2026. The completion of any separation transaction will be contingent upon various conditions and approvals, including approval by BD's board of directors, receipt of requisite regulatory clearances and compliance with applicable U.S. Securities and Exchange Commission requirements. No assurance can be given regarding the form that a separation transaction may take or the specific terms or timing, or that a separation will in fact occur.
