LONDON, UK / ACCESSWIRE / April 25, 2017 / Active Wall St. blog coverage looks at the headline from medical devices makers Becton, Dickinson and Co. (NYSE: BDX) and C. R. Bard, Inc. (NYSE: BCR). Becton, Dickinson and Co. announced on April 23, 2017, that it has signed an agreement to acquire C.R. Bard ("Bard"). The deal will create one of the biggest medical technology and devices Company and expand BDX's portfolio of products and offerings in the high growth areas. The cash plus stock acquisition is valued at $24 billion. Register with us now for your free membership and blog access at:

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Commenting on the acquisition of Bard, Vince Forlenza, Chairman and CEO of BDX said:

"Combining with Bard will accelerate our ability to offer more comprehensive, clinically relevant solutions to customers and patients around the globe, creating a strong partner for healthcare providers who are increasingly focused on delivering better outcomes at a lower total cost."

Tim Ring Chairman and CEO of Bard added:

"Our two Companies share the conviction that a product leadership strategy focused on unmet needs and improved outcomes that provide economic value to the global healthcare system will provide long-term shareholder returns."

Terms of the acquisition

As per the terms of the agreement, each Bard's shareholder will get $222.93 in cash and 0.5077 share of BDX. This puts the value of each Bard's share at $317, based on BDX's closing price of $185.29 on April 21, 2017. The transaction has received the blessings from the Board of Directors of both Companies. The transaction is expected to close in Q4 2017 and is subject to receiving regulatory approvals and closing conditions.

At the close of deal, Bard's shareholders will own approximately 15% in the merged Company.

BDX plans to finance the cash part of the deal using around $1.7 billion of cash in hand, plus a fresh debt of $10 billion. BDX also plans to raise $4.5 billion from sale of equity and equity linked securities. Bard's shareholders will be receiving approximately $8 billion of BDX's shares as part of this transaction. BDX has shelved its share repurchase program for the time being; however, it is confident of annual dividend increases and pay-out even after the completion of the deal.

Post-merger plans

BDX's current businesses are under two verticals ? BD Medical (which includes Diabetes Care, Medication Management Solutions, Medication & Procedural Solutions and Pharmaceutical Systems) and BD Life Sciences (which includes Biosciences, Diagnostic Systems and Preanalytical Systems)

BDX plans to create a third business vertical - BD Interventional. Bard will be absorbed into this vertical. Tom Polen the current Executive Vice President and President of the BD Medical Segment has been promoted as President and will lead all three of BDX's business verticals including the newly formed BD Interventional.

To ensure smooth integration of both Companies, BDX has chosen Bill Tozzi, a seasoned BD executive to lead an integration team comprising of senior members of both Companies. The Board of Directors of BDX will also expand and add two members from Bard - Tim Ring, Chairman and CEO of Bard, and an additional Bard's director, once the transaction is completed.

Strategic Advantages of the deal for BDX

The acquisition is expected to generate high-single digit accretion to adjusted earnings per share (EPS) in fiscal year 2019. The transaction will also lead to $300 million in pre-tax annual savings due to cost synergies by the fiscal year 2020. BDX also expects the transaction to improve its gross margins by 300 basis points in fiscal year 2018 and result in stronger cash flows.

The deal would combine the product portfolio of both Companies which would help the new merged entity to cater to the end-to-end needs of a wide range of customers thereby enhancing the growth opportunities. BDX will be able to expand to new areas where Bard currently operates - fast-growing vascular access segments ? PICCs (peripherally inserted central catheters), midlines and drug delivery ports. Apart from this Bard has a strong presence in lucrative markets outside of the US where it is one of the fastest growing medical technology Companies. BDX will be able to expand its footprint in these markets.

Stock Performance

At the close of trading session on Monday, April 24, 2017, Becton, Dickinson's stock price slipped 4.44% to end the day at $177.07. A total volume of 9.75 million shares were exchanged during the session, which was above the 3-month average volume of 828.68 thousand shares. The Company's share price has surged 12.54% in the past twelve months and 7.38% on YTD basis. The Company's shares are trading at a PE ratio of 29.42 and have a dividend yield of 1.65%. The stock currently has a market cap of $37.73 billion.

In sharp contrast to BDX's shares performance, C. R. Bard's share price finished yesterday's trading session at $302.41, surging 19.50%. A total volume of 11.54 million shares exchanged hands, which was higher than the 3 months average volume of 512.19 thousand shares. The stock has rallied 37.49% and 46.59% in the last six months and past twelve months, respectively. Furthermore, since the start of the year, shares of the Company have soared 34.76%. The stock is trading at a PE ratio of 43.02 and has a dividend yield of 0.34%. At Monday's closing price, the stock's net capitalization stands at $22.38 billion.

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