Waters Corporation and BD (Becton, Dickinson and Company) announced a definitive agreement to combine BD's Biosciences & Diagnostic Solutions business with Waters, creating a life science and diagnostics leader valued at approximately $17.5 billion. The transaction, structured as a tax-efficient Reverse Morris Trust, is expected to close around the end of the first quarter of 2026.
Strategic Combination Creates Market Leader
The combined company will bring together complementary technologies to serve high-volume testing in regulated end-markets, featuring best-in-class liquid chromatography, mass spectrometry, flow cytometry, and diagnostic solutions. This combination doubles Waters' total addressable market to approximately $40 billion with 5-7% annual growth.
"This transaction marks a pivotal milestone in Waters' transformation journey as we embark on a new chapter of growth and value creation," said Flemming Ornskov, M.D., M.P.H., Chairman of Waters. "We are confident that this combination will accelerate our strategy in multiple high-growth markets and deliver substantial near- and long-term value to our shareholders."
The merged entity is expected to generate pro forma revenue of approximately $6.5 billion and approximately $2.0 billion in pro forma adjusted EBITDA for calendar year 2025. Over 70% of the combined company's revenue is expected to be recurring annually, with over half of instrument revenue recurring within a typical five- to ten-year replacement cycle.
Significant Synergy Potential
The transaction is projected to create approximately $345 million in annualized EBITDA synergies by 2030. Cost synergies of approximately $200 million are expected by year three post-closing, driven primarily by optimization in manufacturing, supply chain, and SG&A operations. Revenue synergies of approximately $290 million are anticipated by year five, derived from commercial excellence, expansion into high-growth adjacencies, and cross-selling opportunities.
"We see tremendous opportunity to immediately apply our expertise in instrument replacement, service plan attachment, and eCommerce expansion, and realize the full potential of the flow cytometry and specialty diagnostics portfolios," said Udit Batra, Ph.D., President and Chief Executive Officer of Waters.
Expanding Market Reach
The combination accelerates Waters' expansion into multiple high-growth adjacent end-markets. The bioseparations portfolio will expand by combining Waters' chemistry expertise with BD's biologics expertise to unlock new approaches for separating large molecules and drive growth in biologics and novel modalities.
In bioanalytical characterization, Waters' expertise in downstream high-volume applications and its established Empower™ informatics platform are positioned to deploy BD's flow cytometry and PCR technologies into large molecule quality assurance and quality control applications.
BD's regulatory expertise and established presence in clinical and diagnostic settings is expected to drive enhanced market access, improved service support, accelerated menu expansion, and automation for multiplex diagnostics using LC-MS technologies from Waters.
Financial Outlook and Structure
The pro forma combined company is expected to deliver mid-to-high single-digit revenue growth and mid-teens adjusted EPS growth on an annualized basis between 2025 and 2030. By 2030, the combined company is projected to achieve approximately $9 billion in revenue, $3.3 billion in adjusted EBITDA, and an adjusted operating margin of 32%.
Under the Reverse Morris Trust structure, BD's Biosciences & Diagnostic Solutions business will be spun-off to BD shareholders and simultaneously merged with a wholly owned subsidiary of Waters. BD shareholders are expected to own approximately 39.2% of the combined company, while existing Waters shareholders will own approximately 60.8%.
BD will receive a cash distribution of approximately $4 billion prior to completion of the combination. Waters is expected to assume approximately $4 billion of incremental debt, resulting in a net-debt-to-adjusted EBITDA leverage ratio of 2.3x at closing.
Leadership and Operations
Upon closing, Udit Batra will lead the combined entity as President and Chief Executive Officer, with Amol Chaubal serving as SVP and Chief Financial Officer. Up to two BD designees will join the Waters Board of Directors upon closing.
The combined company will operate under the Waters name and retain its New York Stock Exchange listing under ticker symbol WAT. Waters' headquarters will remain in Milford, Massachusetts, while maintaining a significant presence where BD's Biosciences & Diagnostic Solutions business currently operates.
Business Portfolio Overview
BD's Biosciences division is a leader in immunology and cancer research solutions and related clinical diagnostics, including flow cytometry instruments and reagents, and innovative multiomics tools. The Diagnostic Solutions business leads in microbiology and infectious disease diagnostics, including molecular diagnostics, cervical cancer screening, microbiology automation, and point-of-care offerings.
For calendar year 2025, BD's Biosciences & Diagnostic Solutions business is expected to generate revenue of approximately $3.4 billion and adjusted EBITDA of approximately $925 million.
The transaction has been unanimously approved by the Boards of Directors of both companies and is subject to regulatory approvals, Waters shareholder approval, and other customary closing conditions.
