Merit Medical to purchase Becton Dickinson assets for $100M
Merit’s proposed asset acquisition is subject to the closing of BD’s proposed acquisition of Bard as well as other usual and customary closing conditions.
The assets to be acquired are soft tissue core needle biopsy products currently sold by BD under the trade names of Achieve Programmable Automatic Biopsy System, Temno Biopsy System and Tru-Cut Biopsy Needles.
Additionally, Merit proposes to acquire the Aspira Pleural Effusion Drainage Kits and the Aspira Peritoneal Drainage System currently marketed by Bard.
The purchase price for the product lines and related assets to be acquired is $100M, subject to adjustment for fluctuations in the value of transferred inventory. Merit intends to finance the acquisition at closing through borrowings which are currently available under its revolving credit facility.
After giving effect to the proposed transaction, Merit anticipates its debt to adjusted EBITDA will increase from approximately 2.20 to approximately 2.70.
This transaction is expected to be accretive to both GAAP and non-GAAP earnings in 2018. Merit’s management expects the acquisition to provide incremental annual revenues in the range of $42M-$48M, adjusted gross margins for the subject product lines in the range of 60-70%, and, over a period of six to twelve months, to be accretive by 50-120 basis points to Merit’s adjusted gross margins.
The transaction is also expected to expand operating margins and increase cash flow. Merit’s management expects the acquisition to provide 10c-19c in adjusted non-GAAP EPS accretion in FY18.
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