Summary
Becton, Dickinson and Company (BD) filed an 8-K on November 25, 2014, primarily to update investors on the financing and regulatory progress of its proposed acquisition of CareFusion Corporation. Notably, BD announced a reduction in the anticipated debt financing for the acquisition, now expecting to incur approximately $7.7 billion in indebtedness instead of the previously stated $9.1 billion. This decrease is attributed to BD's ability to utilize more of its existing cash on hand in a tax-efficient manner. The company also confirmed that the waiting period under the Hart-Scott-Rodino (HSR) Antitrust Improvements Act of 1976 has expired, a key condition for the transaction. This revised financing plan, coupled with an expected interest rate range for new debt, leads BD to anticipate that the acquisition will be accretive to cash earnings per share by a high-teen percentage in the first full year post-completion. Investors should also note that the HSR waiting period expiration is a significant step, though the acquisition still requires other approvals, including from CareFusion stockholders and the European Commission.
Key Highlights
- 1BD announced a reduction in expected acquisition-related debt financing for CareFusion from $9.1 billion to approximately $7.7 billion.
- 2The company will fund a larger portion of the acquisition with existing cash on hand in a tax-efficient manner.
- 3BD is seeking commitments for a new $1.0 billion 364-day term loan facility as part of the financing.
- 4The waiting period under the Hart-Scott-Rodino (HSR) Antitrust Improvements Act of 1976 has expired, a condition for the CareFusion acquisition.
- 5The acquisition is now expected to be accretive to cash earnings per share by a high-teen percentage in the first full year post-completion.
- 6The proposed acquisition of CareFusion remains subject to other conditions, including stockholder approval and European Commission clearance.