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Waters Corporation and BD announced a definitive agreement to combine BD's Biosciences & Diagnostic Solutions business with Waters, creating an expanding life science and diagnostics company in a transaction valued at approximately $17.5 billion.
The companies said they expect the transaction will create shareholder value by:
- Bringing together complementary technologies to serve high-volume testing in regulated end-markets: The combined company will have liquid chromatography, mass spectrometry, flow cytometry, and diagnostic solutions.
- Increasing annual recurring revenue in applications: More than 70% of the combined company's revenue is expected to be recurring annually and more than half of instrument revenue is expected to be recurring within a typical five- to 10-year replacement cycle.
- Accelerating Waters' expansion into multiple adjacent end-markets:
- The bioseparations portfolio will expand by combining Waters' chemistry expertise and BD's biologics expertise to unlock new ways to separate large molecules and to drive growth in biologics and novel modalities with next-generation consumables.
- In bioanalytical characterization, Waters' expertise in downstream high-volume applications and its established Empower informatics platform are well-positioned to deploy BD's flow cytometry and PCR technologies into large molecule QA/QC.
- BD's regulatory expertise and established presence in clinical and diagnostic settings is expected to drive enhanced market access, improved service support, accelerated menu expansion, and automation for multiplex diagnostics using LC-MS technologies from Waters.
- Delivering cost and revenue synergies: The transaction is expected to create approximately $200 million of cost synergies by year three post-closing, and approximately $290 million of revenue synergies by year five, resulting in approximately $345 million of annualized EBITDA synergies by 2030.
- Cost synergies are expected to be driven primarily by optimization in manufacturing, supply chain, and SG&A, while maintaining a strong commitment to R&D and commercial investments.
- Revenue synergies are expected to be derived from commercial excellence, accelerating expansion into high-growth adjacencies, and realizing cross-selling opportunities.
