News Feature | June 1, 2015

Report: BD Planning To Divest Surgical Instruments Business

By Jof Enriquez,
Follow me on Twitter @jofenriq

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Becton Dickinson & Co. (BD) reportedly is selling the V. Mueller surgical instruments business it obtained in the CareFusion acquisition earlier this year. BD reportedly has hired JPMorgan Chase & Co to assist in exploratory deals.

Citing sources privy to BD's plans, Reuters reports that the medtech company could net around $500 million for V. Mueller.  A BD representative told Reuters that the company is conducting a strategic review of all of its businesses, and that no decisions have been made, while a JPMorgan spokeswoman declined to comment on the report.

Reuters also reports that BD is expected to divest its respiratory business later this year. A sale of that asset could yield as much as much as $1.5 billion to $2 billion, reported Bloomberg  in March.

BD has been looking to divest non-core assets in the wake of its $12.2 billion cash-and-stock acquisition of CareFusion, completed in mid-March. The potential sale of its surgical instruments and respiratory businesses are in line with those plans.

Selling unwanted assets has become a pressing matter for BD, which cut its full-year outlook as profits slid 25 percent in its latest quarter, according to the Wall Street Journal. BD pointed to a stronger dollar and the merger with CareFusion as reasons for the decline in profits.

However, according to an analysis by Nasdaq.com, selling non-core assets is expected to improve the debt-laden balance sheet of the company. The analysis also states that the purchase of CareFusion should result in significant cost savings for BD, due to its now combined operations and manufacturing footprints, as well as lower overhead expenses.

CareFusion manufactures medication systems and infusion pumps, delivering therapies via catheters and syringes made by BD. The complementary portfolio of the two companies also is expected to give BD greater leverage with hospitals and pharmacies, because these clients are under pressure to maintain quality services under a glut of federal healthcare funding.

Vincent A. Forlenza, CEO of BD, last year described the merger with CareFusion as a "perfect strategic fit," according to a New York Times report. “We’re coming together to improve medication management, primarily in hospitals.”