Becton, Dickinson and Company (BDX, Financials) announced a major strategic shift with plans to separate its Biosciences and Diagnostic Solutions unit, aiming to create two independent, focused companies.

The choice corresponds with BD's 2025 plan, which aims to maximize capital allocation, hasten expansion, and follows a thorough portfolio review starting in early 2024.

Two separate corporations will arise from the projected completion of the split in fiscal 2026. Stressing medical devices, patient monitoring, and biopharma systems, the new BD will be a pure-play medical technology business. Focusing on research tools and sophisticated diagnostic solutions for infectious disease, cancer, and microbiology applications, the standalone Biosciences and Diagnostic Solutions company will While Biosciences and Diagnostic Solutions will concentrate on research tools and sophisticated diagnostics, BD said the split would let New BD concentrate on higher-growth healthcare categories, including pharmaceutical medication delivery and connected care technologies.

Tom Polen, chairman and CEO of BD, said the action builds on the company's multi-year transition and is intended to boost investment in research and development, stimulate innovation, and increase profitability for both organizations. With a $70+ billion addressable market growing at around 5% yearly, the business forecasts the newly autonomous BD to have about $17.8 billion in sales by fiscal 2024. With more than 80% recurring revenues and EBITDA margins around 30% the Biosciences and Diagnostic Solutions company is estimated to bring in around $3.4 billion in income.

The board of BD is assessing several separation strategies, including a spinoff, sale, or Reverse Morris Trust deal.