Becton, Dickinson and Company (BDX) recently announced a definitive deal to buy California-based health care company Safety Syringes, Inc. The financial details of the deal were not revealed by the company. The acquisition is expected to complete by the end of Becton Dickinson’s fiscal 2012 (September), subject to certain regulatory approvals.
Privately-owned Safety Syringes is a leading developer of anti-needlestick instruments for pre-filled syringes. Becton Dickinson plans to integrate Safety Syringes’ specially-designed prefillable syringes, such as the UltraSafe Passive products, in its Medical-Pharmaceutical Systems unit.
The acquisition of Safety Syringes will boost Becton Dickinson’s heath care worker safety products portfolio. Utilizing Safety Syringes’ expertise, the company will be able to develop effective and harmless prefillable syringes for its customers. The acquisition is also in line with the company’s long-term strategy of advancing parenteral drug delivery systems.
Though the acquisition was expected to be slightly dilutive, Becton Dickinson maintained its fiscal 2012 earnings from continuing operations guidance of $5.68–$5.73 per share. The current Zacks Consensus Estimate for fiscal 2012 is $5.70 per share.
We currently have a Neutral recommendation on the stock, which carries a short-term Zacks #3 Rank (Hold).
The rising demand for safety-needle products (with higher price points and margins) was the primary driver of the company’s growth in the past. However, the trend is unlikely to continue, given that the U.S. market has already been largely penetrated.
On the positive side, Becton Dickinson’s preeminent global health care products franchise is partly insulated from volatile macroeconomic conditions and structural deficiencies elsewhere in the health care delivery field.
Becton Dickinson faces a number of competitors, including Baxter International (BAX) in certain niches, in each of its three business segments.
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