Bard, C.R. (BCR) Acquired

Becton Dickinson (BDX) to Acquire Bard (BCR) for $317 (cash & stock) …

No, NOT that Bard!

Becton Dickinson (BDX), a leading global medical technology company, and C. R. Bard (BCR), a medical technology leader in the fields of vascular, urology, oncology and surgical specialty products, announced today a definitive agreement under which BD will acquire Bard for $317.00 per Bard common share in cash and stock, for a total consideration of $24 billion. The agreement has been unanimously approved by the Boards of Directors of both companies.

The combination will create a highly differentiated medical technology company uniquely positioned to improve both the process of care and the treatment of disease for patients and healthcare providers. The transaction will build on BD’s leadership position in medication management and infection prevention with an expanded offering of solutions across the care continuum. Additionally, Bard’s strong product portfolio and innovation pipeline will increase BD’s opportunities in fast-growing clinical areas, and the combination will enhance growth opportunities for the combined company in non-U.S. markets.

  • Textbook “Up, Straight and Parallel”
  • Easy to make a case for 6-8% growth, a projected net margin of 20% and a P/E in the high teens. Remarkably consistent.
  • Is $317 (cash + stock) a good price for the faithful shareholders in our community? Most companies are acquired at a premium — the acquirer will generally pay a price that delivers a ZERO or SUBZERO projected annual return (PAR) according to an updated analysis. (Unless you’re Warren Buffett) In this case, the $317 is a “sell” according to our analysis.

Bcr analysis 20170424

Fear Is Melting Away

As Eddy ElfenbeiImagen recently pointed out, another 6% move to the upside for the S&P 500 and the index will finally be “flat” for the trailing six years.  If stock prices continue to surge and earnings forecasts continue to atrophy, that flat spot could have some downward slope to it.

1. “2012 returns were better than they were supposed to be.” — Jeff Gundlach.

2. Disposable income just took a hit — it’s hard to imagine that it won’t cause some dislocation and economic turbulence.

Updates on a number of community favorites in this week’s Crossing Wall Street:

Fear Is Melting Away