Waters and BD Unite for Industry-Leading Life Sciences and Diagnostics Collaboration
Waters and BD Combine Forces
In a significant shift in the life sciences landscape, Waters Corporation and BD (Becton, Dickinson and Company) have announced a definitive agreement to merge BD's Biosciences and Diagnostic Solutions business with Waters. This strategic collaboration aims to create a powerhouse focused on high-volume, regulated testing, marking a pivotal moment in both companies’ growth trajectories.
A Strategic Partnership
This merger is characterized by a strong alignment of both companies’ strengths and technologies. With Waters being a leader in analytical instruments and chromatographic technologies, and BD’s expertise in clinical diagnostics, the combination promises to enhance service delivery in various high-growth markets. Together, they will leverage their complementary technologies to cover an extensive range of applications from immunology to cancer diagnostics.
The deal, valued at approximately $17.5 billion, is set to double Waters’ total addressable market to around $40 billion, boasting an anticipated annual growth rate of 5-7%.
Financial Insights
Financial projections highlight an impressive outlook for the new entity. Expected pro forma sales for 2025 are pegged at approximately $6.5 billion, with an adjusted EBITDA of around $2 billion. The merger will also increase recurring revenue to over 70%, a substantial portion coming from recognized market-leading brands. The anticipated synergies stand at around $345 million in annualized EBITDA by 2030, showcasing a robust financial future for investors.
Revenue Synergies and Cost Efficiencies
Expected synergies from the merger will include approximately $200 million in cost reductions by year three following the merger's completion, alongside $290 million in revenue synergies by year five. Implementing Waters' proven execution model will be crucial in optimizing manufacturing and enhancing market access, ultimately driving greater efficiency across both organizations.
Leadership Comments
Flemming Ornskov, M.D., M.P.H., Chairman at Waters, emphasized the strategic importance of this merger, stating, “This transaction marks a pivotal milestone in Waters' transformation journey as we embark on a new chapter of growth and value creation.” Udit Batra, Ph.D., President and CEO of Waters, highlighted the immediate opportunities to apply their expertise and drive value creation in various high-growth segments, such as bioanalytical characterization and multiplex diagnostics.
Tom Polen, Chairman, CEO, and President of BD, expressed confidence in the merger's potential, remarking, “We see an incredible opportunity to leverage both companies' commitments to unparalleled innovation, technology, and commercial presence.” His vision centers on harnessing the capabilities of both organizations to address complex healthcare challenges and improve patient outcomes globally.
Future Growth and Market Positioning
Post-merger, the combined entity will not only maintain Waters’ branding but will also retain Waters’ operational base in Milford, Massachusetts. The merger underscores both companies’ commitment to innovation and customer-centric services as they navigate the evolving landscape of healthcare technology. Key leadership roles post-merger will feature executives from both companies ensuring a seamless integration process that preserves the legacy and expertise of BD’s Biosciences team.
Conclusion
As the merger progresses, both Waters and BD are expected to significantly enhance their market position in the life sciences and diagnostics sectors. This collaboration, poised for completion in early 2026, promises to deliver a range of benefits to shareholders and create long-term stakeholders value by focusing on innovation and comprehensive service delivery in critical healthcare segments. Investors, employees, and market participants alike will be keenly observing how this merger unfolds and its impact on the industry as a whole.