BD sells off surgical instruments unit to Steris for $540M

After racking up a string of acquisitions throughout 2022—including one of the medtech industry’s largest of the year in its $1.5 billion buyout of Parata Systems—BD has yet to make any major purchases in 2023. In fact, rather than padding out its portfolio, the company is now trimming down at least one area of the business.

BD announced Tuesday that it has inked a deal with Steris, an Irish maker of medical equipment used for sterilization and surgical procedures, to sell off its surgical instrumentation unit.

Under the terms of their agreement, Steris will take on not only BD’s V. Mueller, Snowden-Pencer and Genesis product lines but also a trio of manufacturing facilities in Missouri, Ohio and Germany as well as the 360 BD employees who work within the business unit. The newly purchased assets will slot into Steris’ healthcare segment, according to the announcement.

The surgical instrumentation platform spans around 20,000 individual products, according to BD, including a variety of laparoscopic tools, sterilization containers and more. It’s currently housed within BD’s surgery business, underneath the interventional segment umbrella.

Steris has agreed to pay $540 million in the deal—more than triple the size of the unit’s yearly revenues, which weigh in around $170 million, per BD. It’s expected to close before the end of BD’s fiscal year on Sept. 30, and the company said in the announcement that it doesn’t expect the sell-off to have a material impact on its 2023 earnings per share.

The medtech giant noted that the decision to shed the surgical instrumentation unit is in line with the “simplify” tenet of its ongoing “BD 2025” growth plan, as it’ll help narrow the focus of BD’s overall portfolio and manufacturing network. The earnings from the transaction will in turn be used to support other, faster-growing areas of the business.

“The surgical instrumentation platform has a 120-year legacy of providing reliable and trusted high-quality products, and Steris is well positioned to maximize the value of this extensive portfolio and is fortunate to be adding such a dedicated and talented team to its organization,” Rick Byrd, president of BD’s interventional segment, said in the announcement.

“This transaction further advances the BD interventional segment’s focus on high-growth end markets,” Byrd continued. “We look forward to continuing to address unmet needs in healthcare through a highly differentiated and innovative set of solutions and products.”

The interventional segment is the smallest of BD’s three main divisions, which also include its medical and life sciences businesses. For all of 2022, BD interventional brought in just under $4.5 billion in revenues—making up less than a quarter of the company’s $18.87 billion total.

The interventional segment’s surgery business—where the surgical instrumentation unit is currently located—registered some of the highest growth across all of BD for 2022. Its $1.4 billion haul represented an increase of 8% compared to the previous year, second only to the 9.5% growth clocked by the acquisition-heavy pharmaceutical systems unit.