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Becton Completes Takeover

Zacks Equity Research

Leading medical technology firm Becton, Dickinson and Company (BDX) recently revealed that it has accomplished the takeover of Safety Syringes, Inc. The monetary terms of the acquisition were not disclosed.

Safety Syringes was a privately held company based in California which focuses on creating anti-needlestick instruments for prefilled syringes.

Becton Dickinson stated that it was enthusiastic about the takeover. The offerings of Safety Syringes would align with the interests of the company by enhancing its focus on high value products and safety of healthcare staff. The takeover represents Becton Dickinson’s commitment toward innovative offerings and strengthens its role on safety know how.

Becton Dickinson believes that the takeover will be dilutive, in a very minor way, to its earnings for fiscal 2013. The acquisition will not affect its earlier released guidance for fiscal 2013.

We remain cautious about Becton Dickinson due to the lack of major short-term catalysts. The rising demand for safety-needle products (with higher price points and margins) was the primary driver of the company’s past growth. This is not expected to continue, given that the U.S. market is already largely penetrated.

On the positive side, Becton Dickinson’s preeminent global healthcare products franchise is partly insulated from volatile macroeconomic conditions and structural deficiencies elsewhere in the healthcare delivery field.

Becton Dickinson faces a wide range of competitors, including Baxter International (BAX) in certain niches, in each of its three business segments. Our Neutral recommendation is supported by a short-term Zacks #3 Rank (Hold).

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