Becton, Dickinson and Company (NYSE:BDX) has agreed to combine its Biosciences & Diagnostic Solutions business with Waters Corporation (NYSE:WAT).
The agreement is structured as a tax-efficient Reverse Morris Trust transaction valued at approximately $17.5 billion. The transaction is expected to close around the end of the first quarter of calendar year 2026.
Biosciences segment offers immunology and cancer research solutions and related clinical diagnostics, including flow cytometry instruments, reagents, and multiomics tools.
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Diagnostic Solutions offers microbiology and infectious disease diagnostics, including molecular diagnostics, cervical cancer screening, microbiology automation, and point-of-care offerings.
For calendar year 2025, BD’s Biosciences & Diagnostic Solutions business is expected to generate revenue of approximately $3.4 billion and adjusted EBITDA of approximately $925 million.
Financial Benefits
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 manufacturing, supply chain, and SG&A optimization while maintaining a strong commitment to R&D and commercial investments.
Revenue synergies are expected from commercial excellence, accelerating expansion into high-growth adjacencies, and realizing cross-selling opportunities.
The combined company is expected to generate pro forma revenue of approximately $6.5 billion and approximately $2.0 billion in pro forma adjusted EBITDA for calendar year 2025.
On a pro forma basis, the combination is expected to deliver mid-to-high single-digit revenue growth and mid-teens adjusted EPS growth on an annualized basis between 2025 and 2030.
By 2030, the pro forma combined company is expected to have an industry-leading financial outlook with approximately $9 billion in revenue, $3.3 billion in adjusted EBITDA, and an adjusted operating margin of 32%.
The transaction is expected to be accretive to adjusted EPS in the first year post-closing.
Commenting on the transaction, Flemming Ornskov, Chairman, Waters, said, “This transaction marks a pivotal milestone in Waters’ transformation journey as we embark on a new chapter of growth and value creation. As the Board of Directors evaluated this opportunity throughout the process, it became evident that combining with BD’s Biosciences & Diagnostic Solutions business is an excellent strategic fit with complementary strengths. We are confident that this combination will accelerate our strategy in multiple high-growth markets and deliver substantial near- and long-term value to our shareholders.”
BD’s shareholders are expected to own approximately 39.2% of the combined company, and existing Waters shareholders are expected to own approximately 60.8%. BD will also receive a cash distribution of approximately $4 billion before completion of the combination.
Waters is expected to assume approximately $4 billion of incremental debt, resulting in a net-debt-to-adjusted EBITDA leverage ratio for the combined company of 2.3x at closing.
Price Action: WAT stock was down 5.07% at $335, and BDX stock was down 0.84% at $174.50 during the premarket session at last check Monday.
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