Becton, Dickinson and Company (BD) has reached a definitive agreement to merge its Biosciences & Diagnostic Solutions business with Waters Corporation in a deal valued at nearly $17.5bn, forming a life science and diagnostics company.
The deal is structured as a Reverse Morris Trust transaction.
The merger is anticipated to double Waters’ total addressable market to around $40bn by combining complementary technologies. These include diagnostic solutions, mass spectrometry, liquid chromatography and flow cytometry.
More than 70% of the new entity’s revenue is anticipated to be recurring annually.
The bioseparations portfolio will benefit from Waters’ chemistry expertise and BD’s biologics knowledge, driving growth in biologics and new modalities.
BD’s regulatory awareness and presence in diagnostic and clinical environments are anticipated to facilitate better market access, faster menu expansion, enhanced service support and automation for multiplex diagnostics utilising Waters’ LC-MS technologies.
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By GlobalDataThe companies anticipate around $200m in cost synergies and about $290m in revenue synergies by the fifth year, post-closing.
This is expected to result in around $345m of annualised earnings before interest, taxes, depreciation, and amortisation (EBITDA) synergies by 2030, driven by optimisations in supply chain, manufacturing, and selling, general, and administrative expenses (SG&A).
BD’s shareholders will own around 39.2% of the combined entity, with current Waters shareholders to own 60.8%.
BD will receive a $4bn cash distribution before the merger’s completion. Waters will assume approximately $4bn of incremental debt, resulting in a net-debt-to-adjusted EBITDA leverage ratio of 2.3× at closing.
The transaction, approved by both companies’ boards of directors, is expected to close by the end of the first quarter of 2026, pending regulatory and shareholder approvals.
Waters’ president and CEO Udit Batra will spearhead the new entity, with Amol Chaubal set to serve as chief financial officer and senior vice-president.
The combined company will retain the Waters name, with headquarters in Milford, Massachusetts, US. It will also maintain a significant presence in current BD Biosciences & Diagnostic Solutions locations.
Barclays is acting as Waters’ financial adviser and Kirkland & Ellis as legal counsel. Citi is serving as BD’s lead financial adviser, with Evercore also acting as a financial adviser. In addition, BD’s lead legal counsel was represented by Wachtell, Lipton, Rosen & Katz.
BD president, chairman and CEO Tom Polen said: “Waters offers the right cultural fit for our Biosciences & Diagnostic Solutions associates to flourish and continue their legacy of developing new-to-world, innovative solutions that make a meaningful impact on global healthcare.”
