Waters to merge with BD’s Biosciences & Diagnostics unit in a US$17.5 billion deal

New Delhi: Waters Corporation and BD (Becton,Dickinson and Company) have announced a definitive agreement to combine BD’s Biosciences & Diagnostic Solutions business with Waters, creating an innovative life science and diagnostics leader with pioneering technologies and an industry-leading financial outlook.

The agreement is structured as a tax-efficient Reverse Morris Trust transaction valued at approximately $17.5 billion.

The companies expect that the transaction will create substantial shareholder value by bringing together complementary technologies to serve high-volume testing in attractive and regulated end-markets: The combined company will have best-in-class liquid chromatography, mass spectrometry, flow cytometry, and diagnostic solutions, doubling Waters’ total addressable market to approximately $40 billion.

Over 70% of the combined company’s revenue is expected to be recurring annually and over half of instrument revenue is expected to be recurring within a typical five- to ten-year replacement cycle.

The bioseparations portfolio will expand by combining Waters’ chemistry expertise and BD’s biologics expertise to unlock new ways to separate large molecules and to drive growth in biologics and novel modalities with next-generation consumables. In bioanalytical characterization, Waters’ expertise in downstream high-volume applications and its established Empower™ informatics platform are well-positioned to deploy BD’s flow cytometry and PCR technologies into large molecule QA/QC.o BD’s regulatory expertise and established presence in clinical and diagnostic settings is expected to drive enhanced market access, improved service support, accelerated menu expansion, and automation for multiplex diagnostics using LC-MS technologies from Waters.

The transaction is expected to create approximately $200 million of cost synergies by year three post-closing, and approximately $290 million of revenue synergies by year five, resulting in approximately $345 million of annualized EBITDA synergies by 2030.

Providing an industry-leading pro forma growth outlook with rapid adjusted EPS accretion: The combined company is expected to generate pro forma revenue of approximately $6.5 billion and approximately $2.0 billion in pro forma adjusted EBITDA for calendar year 2025. On a pro forma basis, the combination is expected to deliver mid-to-high single-digit revenue growth and mid-teens adjusted EPS growth on an annualized basis between 2025 and 2030. By 2030, the pro forma combined company is expected to have an industry-leading financial outlook with approximately $9 billion in revenue, $3.3 billion in adjusted EBITDA, and an adjusted operating margin of 32%. The transaction is expected to be accretive to adjusted EPS in the first year post-closing.

Flemming Ornskov, M.D., M.P.H., Chairman, Waters, said: “This transaction marks a pivotal milestone in Waters’ transformation journey as we embark on a new chapter of growth and value creation. As the Board of Directors evaluated this opportunity throughout the process, it became evident that combining with BD’s Biosciences & Diagnostic Solutions business is an excellent strategic fit with complementary strengths. We are confident that this combination will accelerate our strategy in multiple high-growth markets and deliver substantial near- and long-term value to our shareholders.”

Udit Batra, Ph.D., President and Chief Executive Officer, Waters, said: “We are bringing together two pioneering organizations with a rich history of delivering breakthrough innovations driven by strong R&D investment and a common customer-centric culture. I look forward to welcoming our talented and like-minded colleagues from BD’s Biosciences & Diagnostic Solutions business and leading the collective organization. Together, we will work to make this combination a resounding success for our stakeholders and deliver significant value for shareholders.”

Tom Polen, Chairman, CEO and President, BD, said: “We are bringing together complementary portfolios and channels that create an industry-leading life science and diagnostics company. We see an incredible opportunity to leverage both companies’ commitments to unparalleled innovation, technology, and commercial presence to serve attractive high-growth end-markets, while simultaneously unlocking multiple new growth vectors. We couldn’t be more confident that the combined company, under Udit’s leadership, represents the best path to create substantial value for shareholders. 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.”