C.R. Bard’s business profile
C.R. Bard (or Bard) (BCR), headquartered in Murray Hill, New Jersey, is one of the leading medical device companies in the United States. It provides medical equipment in the areas of urology, oncology, vascular, and surgical specialties. Its products include catheters and heart implants. The company had sales of $3.7 billion in 2016.
Bard’s international sales contribute about 33.0% to the company’s total sales. It has a strong growth rate in emerging markets. In 2016, it registered approximately 500 products outside the United States. For more about the company, read C. R. Bard, Medical Technology Giant: An Investor’s Guide.
Boston Scientific (BSX) and Medtronic (MDT) are Bard’s major competitors in the US medical device industry. Investors seeking exposure to Bard can invest in the iShares Core S&P 500 (IVV), which holds ~0.19% of its total holdings in Bard.
Deal rationale: Bard’s perspective
Becton, Dickinson and Company (or BD) (BDX) announced the acquisition of C.R. Bard on April 23, 2017. The deal is expected to help expand Bard’s portfolio of products in markets outside the United States. Bard’s strong vascular and surgery product portfolio is expected to be highly complementary to BD’s CareFusion portfolio in international markets. The combined company is expected to have around $1.0 billion in revenues from China.
According to Bard’s chairman and chief executive officer Timothy Ring, “We are confident that this combination will deliver meaningful benefits for customers and patients as we see opportunities to leverage BD’s leadership, especially in medication management and infection prevention. We also believe that we can expand our access to customers and patients through BD’s strategic selling capabilities, and that our fast-growing portfolio in emerging markets can significantly benefit from their well-established international commercial infrastructure. 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.”
Next, let’s see how the deal is expected to create value for BD shareholders.