LONDON, UK (GlobalData), 9 October 2014 – The recent $12.2 billion acquisition of CareFusion Corporation by Becton, Dickinson and Company (BD), a medical supplies and surgical instruments manufacturer, will result in strong cash flow generation and returns on investment capital, according to an analyst with research and consulting firm GlobalData.
Furthermore, Premdharan Meyyan, GlobalData’s Analyst covering Medical Devices, states that by shrewdly closing deals with smaller businesses that are developing innovative technologies, BD is expected to continue seizing significant overall market share in the $20 billion drug management space.
Meyyan says: “BD continues to use strategic acquisitions as an integral part of its growth strategy. For example, the company acquired Alverix, a producer of point-of-care handheld diagnostic devices, earlier this year to expand its diagnostics platform.
“BD has seen a steady increase in its total revenue since 2009 and this trend is set to continue following its merger with CareFusion.”
The analyst notes that while BD has historically focused on product development, this latest deal reflects the company’s increasing interest in healthcare innovation.
Meyyan explains: “Companies taking a more proactive role in patient care should improve outcomes for both patients and businesses alike.
“Offering comprehensive training programs for physicians in using new products could improve relationships between manufacturers and healthcare providers, therefore helping to establish a loyal consumer base.”
BD has previously explored intravenous (IV) catheter systems to ensure safe drug delivery for both patients and providers. These included the Nexiva Closed IV Catheter System, which aimed to deliver improved first-stick success rates, whereby accessing the vein on the first attempt reduces the chance of needlestick injury or infection.
Meyyan continues: “CareFusion’s focus on using disposables to reduce the prevalence of hospital-acquired infection, which affects approximately 2 million patients annually in the US alone, seems to align with BD’s overall strategy of expanding within this market.
“While the two companies’ portfolios are complementary in terms of their applications, it will be fascinating to see how BD incorporates CareFusion’s proprietary technologies into its own product line,” the analyst concludes.