Becton, Dickinson and Company BDX, popularly known as BD, is evaluating the divestment of its Life Sciences division as part of a broader strategic shift toward becoming a pure-play medtech company. According to a Financial Times report, BD has initiated discussions with several potential buyers, including Thermo Fisher Scientific, Danaher and a group of smaller diagnostics companies. This move follows BD’s February announcement that it would explore strategic alternatives for the unit, including a full sale, a spin-off, or a tax-free share swap transaction.

The Life Sciences unit, comprising the Biosciences (“BDB”) and the Integrated Diagnostic Solutions (“IDS”) businesses, generated significant revenues in 2024. While IDS includes technologies for detecting infectious diseases and cancers, BDX has decided to retain the specimen management segment, which is part of IDS.

Likely Trend of BDX Stock Following the News

Shares of the company have moved south 9.3% since the Financial Times report on April 1. However, this significant fall is primarily due to the global stock market rout following the imposition of “reciprocal tariffs” by the U.S. government on its trading partners.

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In the year-to-date period, BDX’s shares have lost 9.6% compared to the industry’s 3.4% growth. The S&P 500 has decreased 14.1% in the same time frame.

The divestment could unlock shareholder value by streamlining BD’s portfolio, enabling focused investment in high-growth medtech areas, and potentially delivering tax-efficient returns through premium-priced or strategic deal structures.

Preliminary Plans by BD

Strategic interest in the business has been strong. Thermo Fisher is reportedly eyeing BD’s flow cytometry business, which plays a critical role in cell and gene therapy as well as immune-oncology applications. Danaher, already a major player in the field, might be looking at complementary parts of the business.

BD is considering a share swap deal with smaller diagnostics firms, such as Waters Corporation, Qiagen and Revvity. Under this structure, BD would merge the Life Sciences unit with a listed entity, with BD shareholders receiving a majority stake in the new company, thus avoiding the capital gains tax typically associated with a sale.

Though rare due to their complexity, share swaps offer a compelling tax advantage and flexibility in structuring. Private equity firms are also said to be exploring the asset and may potentially partner with strategic players either to acquire the business outright or break it into parts.

BD’s Divestment Initiatives

This potential divestiture follows BD’s 2022 spin-off of its diabetes unit, Embecta, and reflects the company's broader goal to focus capital and management resources on higher-growth areas.

The board’s unanimous approval of the Life Sciences separation in February indicates strong internal alignment with this strategy. The shift also comes amid growing influence from activist investor Starboard Value, which took a stake in BD prior to the announcement and is reportedly pushing for the divestiture to unlock shareholder value and eliminate what it sees as a “sum-of-the-parts” discount in BD’s valuation. Since February, BD’s shares have declined roughly 7.5%, reflecting market uncertainty around the outcome and timeline of the deal.

BD is expected to announce further plans for the Life Sciences unit by mid-2025, with a targeted transaction close by the end of next year. While several options remain on the table, the outcome of this strategic move could significantly reshape BD’s future while impacting competitive dynamics across the life sciences and diagnostics industries.

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BDX’s Zacks Rank & Stocks to Consider

BDX carries a Zacks Rank #3 (Hold) at present.

Some better-ranked stocks in the broader medical space are Masimo MASI, Boston Scientific BSX and Align Technology ALGN. At present, Masimo sports a Zacks Rank #1 (Strong Buy), whereas Boston Scientific and Align Technology carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.

Masimo’s shares have declined 9% so far this year. Estimates for MASI’s 2024 earnings per share (EPS) have increased 1.2% to $4.10 in the past 30 days. MASI’s earnings beat estimates in each of the trailing four quarters, the average surprise being 17.1%. In the last reported quarter, it posted an earnings surprise of 16.6%.

Estimates for Boston Scientific’s 2025 EPS have jumped 2.9% to $2.85 in the past 30 days. Shares of the company have gained 2.5% so far this year against the industry’s decline of 2.2%. BSX’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 8.25%. In the last reported quarter, it delivered an earnings surprise of 7.69%.

Estimates for Align Technology’s fiscal 2025 EPS have remained stable at $9.99 in the past 30 days. Shares of the company have lost 26.5% so far this year compared with the industry’s 3.4% decline. ALGN’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 3.53%. In the last reported quarter, it delivered an earnings surprise of 0.41%.

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