While reporting financial results for the second fiscal quarter of the year, during which revenues grew more than 15% to $4.9 billion, Becton Dickinson and Co (NYSE: BDX) also laid out its plans to spin off its diabetes-focused segment.
Split Highlights: The split is expected to be completed in the first half of 2022, after which the segment will become a completely separate, publicly-traded company, tentatively dubbed “NewCo.”
The independent venture will be based in New Jersey and Massachusetts, with manufacturing sites throughout the U.S., Ireland, and China.
The new company will be led by CEO Devdatt Kurdikar, who joined BD in February as president of BD Diabetes Care, and Chief Financial Officer Jacob Elguicze, who joined BD this month and is the former treasurer and head of investor relations for Teleflex.
The new company will aim to build on BD’s established footprint in the diabetes care market, where it reported revenues of nearly $1.1 billion for the fiscal year 2020.
Numbers: BD currently produces around 8 billion injection devices annually for 30 million patients, leaving plenty of room for NewCo to expand operations to reach approximately 463 million people worldwide with diabetes.
BD said separating its diabetes business will give it the space it needs to accumulate the resources and leadership necessary to meet the rising global demand for insulin delivery devices.
“The spinoff will allow BD to strengthen its growth profile, enables a greater investment focus on our other core businesses and high-growth opportunities, and makes a greater impact for our customers and patients,” BD CEO Tom Polen said.
“As a standalone public company, we believe NewCo will be better positioned to leverage its leadership position in insulin delivery to advance vital, innovative solutions to the large and growing number of people living with diabetes worldwide,” Polen added.
Price Action: BDX shares are down 3.99% at $239.8 during market trading hours on the last check Thursday.
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