Leading global medical technology company, Becton, Dickinson and Company BDX, popularly known as BD, recently announced a follow-on offering of $4.5 billion for its shares. Of these $2.25 billion consists of common stock while the remaining $2.25 billion are depositary shares.
Stock Performance
Year to date, Becton shares have increased roughly 8.61% comparing unfavorably with the Zacks categorized Medical/Dental-Supplies’ sub-industry’s addition of 11.41%. The current level is also lower than the S&P 500’s return of 8.87% in the same time frame.
More About the Offering
Coming back to the news, Becton’s common stock intended for the offering is valued at par of $1.00 per share. Of the depositary shares, each represents 0.05% interest in its mandatory convertible preferred stock with a par value $1.00 per share.
The company intends to use the proceeds from the offerings to finance a portion of the cash consideration payable in connection with its planned acquisition of C. R. Bard Inc. BCR. The acquisition is expected to close in the fall of 2017. We believe the combined company will have a larger presence in medication management and infection prevention space and bolster its foothold in the global medical devices market, which is expected to reach a worth of $543.9 billion by 2020.
Based in Franklin Lakes, NJ, Becton, Dickinson is a medical technology company engaged principally in the development, manufacture and sale of medical devices, instrument systems and reagents.
Going forward, BD’s focus on product launches is a significant catalyst in our view. Additionally, its expansion plans, especially in the emerging overseas markets and the acquisition-driven strategy hold considerable promise.
On the flipside, lower demand for healthcare products, intensifying competition, significant exposure to foreign exchange volatility and higher debt levels pose major headwinds.
Zacks Rank & Stocks to Consider
Becton has a Zacks Rank #3 (Hold).
Better-ranked medical stocks include, Baxter International Inc. BAX and Bio-Rad Laboratories, Inc. BIO. Baxter International sports a Zacks Rank 1 (Strong Buy) while Bio-Rad Laboratories carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Baxter International rose around 21.0% in the last one year, in comparison to the S&P 500’s 16.1%. It has a four-quarter average earnings surprise of 17.14%.
Bio-Rad Laboratories gained 57.2% in the past one year, better than the S&P 500 mark. It has a four-quarter average earnings surprise of 13.10%.
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May 11, 2017 at 06:47PM
from Zacks Equity Research
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