BD to Acquire Edwards Lifesciences’ Critical Care Unit for $4.2B

Becton, Dickinson, and Company (BD), a global medical technology business, has agreed to purchase a key unit of Edwards Lifesciences for $4.2 billion in cash.

BD plans to fund the transaction, which is expected to close by the end of the year, with approximately $1 billion of cash and $3.2 billion of new debt.

The deal focuses on Edwards’ critical care business, which includes remote monitoring tools for patients in hospitals.

Edwards said last December that it intended to spin off its Critical Care division by the end of this year. However, with this deal, the company will no longer pursue the spinoff.

Franklin Lakes, NJ-based BD said the acquisition will improve its smart connected care solutions, noting that Edwards’ critical care division pioneered the hemodynamic monitoring category, which is a method that checks blood circulation and assesses how well the heart works.

The Irvine, CA-based Critical Care unit will operate as a separate business entity within BD’s medical segment after the transaction, overseen by Katie Szyman, Edwards’ corporate VP of Critical Care.

“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,” said Tom Polen, chairman, CEO and president of BD.

The deal is expected to be immediately accretive to BD’s revenue growth, adjusted gross and operating margins, and adjusted earnings per share.

Critical Care’s long-term financial profile is likewise forecast to generate consistent revenue growth of 6% to 7%, with year-one adjusted gross margins of at least 60% and adjusted operating margins of at least 25% that rise over time.