Becton, Dickinson and Company (NYSE:BDX) entered into an agreement to acquire Critical Care Product Group of Edwards Lifesciences Corporation (NYSE : EW) for $4.2 billion on June 3, 2024. BD expects to fund the all-cash transaction with approximately $1 billion of cash and $3.2 billion of new debt. Upon closing, Critical Care will operate as a separate business unit within BD?s Medical segment to align with its smart connected care approach, and it will maintain its presence in Irvine, Calif. Katie Szyman, who has served as corporate vice president of Critical Care since 2015, will lead the new business unit within BD, reporting to Mike Garrison, executive vice president and president of the BD Medical segment.

The transaction is subject to customary regulatory reviews, the receipt of required antitrust and foreign investment approvals and closing conditions. The transaction is expected to close before the end of the 2024.

At closing, BD is expected to have net leverage of approximately 3x and expects to de-lever to its 2.5x long-term net leverage target within 12 to 18 months of closing, primarily by deploying its free cash flows to debt repayment. The transaction meets all of BD?s rigorous investment criteria on growth, profitability and returns. It is expected to be immediately accretive to all key financial measures, including BD?s revenue growth, adjusted gross and operating margins, and adjusted earnings per share. Critical Care?s long-term financial profile is also expected to deliver durable revenue growth of approximately 6% to 7%, with year-one adjusted gross margin of at least 60% and adjusted operating margins of at least 25% that increase over time. Consistent with the company?s BD 2025 strategy, growth-enhancing and value-creating tuck-in M&A continues to be a key part of BD?s targeted financial profile.

Perella Weinberg Partners and Citi acted as financial advisers, and Emily Oldshue, Marko Zatylny, Amanda Austin, Benjamin Rogers, Jenny Rikoski Whitney, Jonathan Klarfeld, Ruchit Patel, Jennifer Romig, Ed McNicholas, Josh Oyster, Lincoln Tsang and Katherine Wang, Richard Kidd and David Kaye of Ropes & Gray, LLP acted as legal counsel to BD. Goldman Sachs & Co. LLC and Morgan Stanley & Co. LLC acted as financial advisors, and Skadden Arps acted as legal counsel to Edwards.