Inside the $12.2 Billion Becton Dickinson, CareFusion Deal
Becton, Dickinson & Co. (NYSE: BDX) recently announced that it will be acquiring the San Diego biomedical business CareFusion (NYSE: CFN) for $12.2 billion.
The purchase price is nearly three times CareFusion’s value on its first day of trading, when it closed with a market valuation of $4.2 billion.
The deal, expected to close in the first half of next year, will be the second largest purchase of a life science company in the Southern California region, according to U-T San Diego. The largest was the sale of Life Technologies in Carlsbad to Thermo Fisher Scientific, officially concluded in February for $13.6 billion.
The deal is the latest in a series of mergers and acquisitions within the health care industry, particularly in the medical technology sector as companies continue to seek greater efficiency.
The combination of the two companies’ complementary product portfolios will offer integrated medication management solutions and smart devices, from drug preparation in the pharmacy to dispensing on the hospital floor and administration to the patient. It will create one of the five largest medical device companies in the world.
The acquisition will improve quality of patient care and reduce health care costs by addressing unmet needs in hospitals, hospital pharmacies and alternate sites of care to increase efficiencies and reduce medication administration errors.
Under the terms of the transaction, Becton will pay $58 a share for CareFusion, most of that in cash. Upon closing, Becton shareholders will own approximately 92 percent of the combined company and CareFusion shareholders will own approximately 8 percent.
“BD’s acquisition of CareFusion allows us to align our highly complementary technologies and products to address unmet needs in the growing $20 billion global medication management industry, which leverages BD’s world-wide infrastructure,” said Vincent A. Forlenza, Becton, Dickinson’s Chairman, CEO and President. “With the targeted cost savings we have identified and the growth opportunities we see in bringing CareFusion products to more patients and healthcare workers around the world, we expect this transaction to create meaningful value for our shareholders, customers, employees and other stakeholders.”
CareFusion was formed in 2009 as a spinoff from Cardinal Health, bringing together well-known lines of medical equipment developed in San Diego by three companies — IVAC, IMED and Pyxis.
Goldman Sachs advised BD, and Skadden, Arps, Slate, Meagher & Flom provided legal advice. Perella Weinberg Partners and Barclays advised CareFusion and Wachtell, Lipton, Rosen & Katz provided legal advice.
Bachem turns 50 - a timeline
Bachem, a supplier to pharmaceutical and biotechnology companies worldwide, is celebrating its 50th anniversary this month. We take a look at the Swiss company's history.
1971 - beginnings
Bachem is founded by entrepreneur Peter Grogg in Liestal, a small town near Basel in Switzerland. Grogg started the firm with just two employees, and with a focus on peptide synthesis - peptides are composed of amino acids that have a variety of functions treating health conditions such as cancer and diabetes.
1977 - 1981 - early growth
Bachem moves its headquarters to the Swiss town of Bubendorf, with eight employees. In 1978 the company produces peptides for use in medicines for the first time. In 1981 production capacity triples and the workforce grows to 150.
1987 - 1996 - worldwide expansion
The company expands into the US with Bachem Bioscience, Inc. in Philadelphia. To strengthen its presence in Europe, Bachem opens sales and marketing centres in Germany in 1988.
Further sales centres open in France in 1993. By 1995 the company employs 190 people. In 1996 it acquires the second largest manufacturer of peptides in the world and forms Bachem California with a site in Torrance.
1998 - 2003 - Bachem goes public
Bachem company goes public and lists shares on the Swiss Stock Exchange. Further acquisitions include Peninsula Laboratories, Inc, based in California, and Sochinaz SA, a Swiss-based manufacturer of active pharmaceutical ingredients. By 2001, the company has 500 employees and sales reach 141 million CHF.
In 2003 the organisation is given a new legal holding structure to support its continued growth, which remains in place to this day.
2007 - 2013 - acquisitions
Bachem acquires a brand by Merck Biosciences for ready-to-use clinical trial materials and related services.
In 2013, together with GlyTech, Inc. Bachem announces the development of a new amino acid that can help to treat multiple sclerosis, with a world market of more than $4 billion.
In 2015 it acquires the American Peptide Company (APC), which becomes integrated into Bachem Americas.
2016 - 2019 - a global leader
In 2016 the group opens a new building dedicated to R&D projects and small series production in Bubendorf. With a total of 1,022 employees, the workforce exceeds the 1,000 mark for the first time in the company’s history. Sales are over the 200 million mark for the first time at 236.5 million CHF.
Bachem expands into Asia with the establishment of a new company in Tokyo called Bachem Japan K.K.
By 2019 Bachem has a growing oligonucleotide portfolio - these are DNA molecules used in genetic testing, research, and forensics. It is hoped this will become a significant product range in the future.
2020 - COVID-19
Despite the COVID-19 pandemic, Bachem secures its supply of active ingredients, and even increases it in critical areas. Sales exceed the 400 million Swiss franc mark for the first time, and 272 new employees are hired.
2021 - a milestone anniversary
Bachem celebrates its 50th anniversary and position as a global leader in the manufacture of peptides. While it remains headquartered in Bubendorf, the company employs 1,500 people at six locations worldwide. In the next five years there are plans to continue expanding.
Commemorating the company's anniversary, Kuno Sommer, Chairman of the Board of Directors, said: "Bachem's exceptional success story from a small laboratory to a global market leader is closely linked to Peter Grogg's values, and has been shaped by innovation, consistent quality and cost awareness, as well as by entrepreneurial vision."