Dive Brief:
- Becton Dickinson has begun tender offers to pay cash for as much as $500 million for debt securities it previously issued.
- The offers cover senior notes and debentures that are due between 2027 and 2050. BD paid down about $500 million in debt in the third quarter of its fiscal year, which ended on June 30.
- BD, having ended the quarter with a debt leverage ratio of 2.7 times, continues to work toward its goal of getting the ratio down to about 2.5 times, according to Fitch Ratings.
Dive Insight:
BD has reduced its debt by about $5 billion since closing the takeover of C.R. Bard in 2017, Fitch said in June. The drop in debt covers a period in which BD, having bought CareFusion and Bard in quick succession, has used its cash flow for debt reduction and limited its M&A activity to smaller tuck-in acquisitions.
The spinoff of the diabetes business to form Embecta has provided proceeds that BD plans to use to pay $1 billion in debt, according to the Fitch report. The moves by BD are aimed at supporting its growth strategy, as chief financial officer Christopher DelOrefice explained to investors on a conference call to discuss fiscal third-quarter results earlier this month.
“We are pleased by our recent debt upgrades from both Moody's and Fitch, which reflect the strength of our business and disciplined approach on balance sheet management and capital deployment. Our current cash and leverage position and continued focus on cash flow provide us the flexibility to advance our balanced capital allocation framework in support of our BD2025 growth strategy,” DelOrefice said.
BD agreed in June to acquire pharmacy automation company Parata Systems for $1.53 billion, representing its largest takeover since buying Bard in 2017. The company also has struck smaller deals to buy Cytognos and MedKeeper.
