C.R. Bard ($BCR) plans to grab Rochester Medical ($ROCM) for about $262 million in cash, an acquisition that will give it a major leg up in the global urology home care devices market.
It's also Bard's second major M&A deal in a month. The Murray Hill, NJ, company recently announced it would acquire Minnesota-based Medafor in a deal worth at least $200 million, which will bring it deeper into the blood clotting business.
Urology home care is a lucrative segment, worth an impressive $930 million globally, and Bard sees major opportunity to grow its share by grabbing Rochester Medical. The Stewartville, MN, company is, in part, the developer, maker and seller of disposable home-use medical catheters and devices for urological and continence care. And it is doing what it does very well as a rising player in the broader, $800 million global market for intermittent self-catheters. Rochester Medical also leads the $130 million market for male external catheters--used to treat male urinary incontinence--and has plenty of other promising products for this class of patients, Bard notes.
"We believe that strengthening our position in the home care market, and specifically the large and fast-growing intermittent self-catheter segment, is strategically important at this time," Bard chairman and CEO Timothy Ring said in a statement.
Bard also sees a growth engine in Rochester Medical's distribution system and customer access programs. Also, the company views the acquisition as boosting its own urology offerings. Rochester Medical, for its part, sees becoming part of Bard as a way to boost the products it can bring to its own client base.
"We believe the merger represents a great opportunity for the combined companies to create a broad product portfolio by offering a more comprehensive range of high-quality urological and continence care products to our customers," Rochester Medical president and CEO Anthony Conway said in a statement.
Conway said he also sees the sale as a good deal for shareholders. The price breaks down to about $20 per share, a 37% premium over the company's average closing price during the 90 trading days ending Sept. 3, 2013. Assuming regulatory approvals come through and Rochester Medical shareholders sign-off on the sale, the deal will close in the 2013 fourth quarter.
Meanwhile, Bard continues to prepare for an onslaught of lawsuits involving its Avaulta vaginal mesh implant. Thousands of women are suing the company, alleging the device caused them harm. Many other vaginal mesh manufacturers face similar legal action regarding their competing products.
- here's Bard's announcement
- check out Rochester Medical's release