BD to Buy Edwards Lifesciences' Critical Care Product Group for $4.2 Bn

BD’s portfolio includes the Swan Ganz pulmonary artery catheter, minimally invasive sensors, noninvasive cuffs, and tissue oximetry sensors and monitors.

BD (Becton, Dickinson, and Company), a leading global medtech company, has set its foot to buy Edwards Lifesciences’ Critical Care Product Group for $4.2 Bn.

The US-based company inked a definitive agreement under which BD will acquire Edwards' Critical Care Product Group for $4.2 billion in cash,

This strategic move aims to enhance BD's portfolio of smart connected care solutions.

Sharing thoughts, Tom Polen, chairman, CEO, and president of BD, said, "Critical Care expands BD's portfolio of smart connected care solutions with its growing set of leading monitoring technologies, advanced AI-enabled clinical decision tools, and robust innovation pipeline that complement BD's existing technologies serving operating rooms and intensive care units."

He further noted that critical care is well aligned with BD's core innovation and business strategies.

‘’We believe the combination unlocks multiple new avenues for growth and value creation through BD's broad global footprint, increased penetration across new and existing hospital customers, new innovation opportunities across data sets and platforms, and application of the BD Excellence operating system,’’ CEO Pollen added.

Critical Care’s Portfolio

Critical Care is a high-growth leader in advanced patient monitoring with AI algorithms. It invented the hemodynamic monitoring category, with solutions used in over 10,000 hospitals globally to improve real-time cardiovascular assessments for critically ill patients.

Hemodynamic monitoring and medication management technologies are often used in operating rooms or ICUs, offering opportunities for innovation and interoperability.

Moreover, Critical Care employs approximately 4,500 people, mostly in Irvine, California, and generated over $900 million in revenue in 2023.

Its portfolio includes the Swan Ganz pulmonary artery catheter, minimally invasive sensors, noninvasive cuffs, and tissue oximetry sensors and monitors.

Advanced data analytics, machine learning, and AI-based algorithms drive its smart technologies, aiding clinicians in understanding patient conditions and supporting clinical decisions.

Financial Highlights

Per the agreement, BD will acquire Critical Care for $4.2 billion in cash. The deal meets BD's strict criteria for growth, profitability, and returns. Further, it is expected to boost BD's revenue growth, adjusted margins, and earnings per share immediately.

Critical Care is projected to see revenue growth of 6% to 7%. In the first year, it expects at least 60% gross margins and 25% operating margins, increasing over time. This move aligns with BD's BD2025 strategy for strategic M&A.

Moreover, moderate synergies will drive margin expansion, mainly from cost efficiencies, supply chain improvements, and reduced administrative expenses, while maintaining Critical Care's commercial and innovation strengths.

BD also plans to fund the transaction with $1 billion in cash and $3.2 billion in new debt. Post-closing, BD's net leverage will be around 3x, to reduce it to 2.5x within 12 to 18 months using free cash flow.

The deal is expected to close by year-end, pending regulatory reviews and conditions.

Critical Care will operate as a separate unit within BD's Medical segment, based in Irvine, California. Katie Szyman will lead the unit, reporting to Mike Garrison.

Perella Weinberg Partners and Citi are financial advisers. Ropes & Gray, LLP is providing legal counsel.