Global medical technology company Becton, Dickinson and Company (BDX) recently acquired privately-held Irish biotech company – GenCell Biosystems – advancing the former’s entry into the Next Generation Sequencing market. Financial details of the transaction have been kept under wraps.
Next generation sequencing (NGS), also known as second generation sequencing, is a new method for sequencing genomes at high speed, low cost and with great accuracy. It is a fast-growing segment believed to have the potential to significantly impact the healthcare market.
Founded in 2011, GenCell has developed proprietary technologies that address key biological analysis protocols – from library preparation of NGS to genotyping for agricultural applications. It has created an automated platform that has the potential to address key unmet customer needs in library preparation for NGS.
The GenCell acquisition will enable Becton, Dickinson to offer a differentiated platform in the NGS market, constructing a base to further expand its genomics offerings.
Earlier this month, Becton, Dickinson entered into a mega $12.2 billion deal to acquire San Diego-based CareFusion Corporation (CFN) in an attempt to create a globally leading entity in the medication management and patient safety solutions market. Per the agreement, Becton, Dickinson will pay a total of $58.00 a share – $49.00 in cash and 0.0777 of a share of Becton, Dickinson – for each share of CareFusion.
The transaction, expected to close in the first half of next year, is projected to provide Becton, Dickinson double-digit earnings growth, on an adjusted basis, in the first full year. It will also prove accretive to net earnings in fiscal 2018. Apart from earnings growth, the deal is likely to expand EBITDA margins, and deliver strong cash flow and return on invested capital.
Becton, Dickinson has also identified $250 million of pre-tax cost synergies, including savings from the merger, which are expected to be fully realized in fiscal 2018.
Currently, Becton, Dickinson carries a Zacks Rank #3 (Hold).
Better-ranked stocks in the medical/dental supply industry include The Cooper Companies Inc. (COO) and Cardinal Health, Inc. (CAH). While The Cooper Companies sports a Zacks Rank #1 (Strong Buy), Cardinal Health carries a Zacks Rank #2 (Buy).
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