USA – BD has announced that it will acquire Parata Systems, a specialist in technology solutions for automating pharmacies, in an all-cash deal worth US$1.5 billion.
The agreement was inked with the private equity company Frazier Healthcare Partners, whose portfolio company TCGRx acquired Parata in 2018.
Parata was founded in 2006 and since then has grown to a company generating 12-month revenue of around US$220 million, with a double-digit growth profile.
Its solutions, which are used by hospitals, retail pharmacies and care homes, are designed to help streamline the pharmacy workflow, reduce costs and enhance patient safety, while improving overall patient experience.
BD is better known to consumers for its diagnostic testing business and medication delivery products that include syringes used to administer Covid-19 vaccines.
The acquisition will give BD entry into a new US$600-million pharmacy automation market segment that is expected to grow approximately 10% annually to US$1.5 billion in the US alone over 10 years.
Significant macro trends such as clinician shortages, wage inflation, centralization of pharmacy services and increased clinical demands on pharmacists are driving demand for intelligent workflow solutions and the pharmacy automation segment.
Through the use of automation and advanced software, pharmacists can focus more of their time on higher value clinical work and patient interactions to help improve medication adherence, medication safety and patient outcomes.
The Parata deal is expected to close by the end of the first half of BD’s fiscal year 2023. The transaction is expected to be immediately accretive to revenue growth, adjusted operating margin and adjusted earnings per share, and exceed the company’s 2025 sales growth and margin targets.
This acquisition aligns with BD’s strategy to build a smarter, connected health portfolio that addresses the care continuum and enables care to be delivered in new settings, including the patient’s home.
In the last few months, BD has launched automated solutions across its different businesses, such as a robotics platform for automatic microbial identification and forged partnerships and inked other M&A deals to facilitate home-based diagnostics.
This move by BD appears to have the blessing of its investors, with its share price rallying when the market opened on June 6.
BD said Parata’s largest offerings are with their “repackaging technology and intelligent/digital workflow systems.
Such technologies allow patient specific prescriptions to be digitally sent to Parata systems, which can then automatically prepare prescriptions in vials, bottles, pouches or blister packages for nearly all pharmacy end markets from retail to hospitals to long-term care to mail order and digital pharmacies.
Evercore analyst Vijay Kumar wrote: “Parata seems to be the right deal for BDX – [it] plays in a near adjacency and there are clear channel synergies…We think this is an astute deployment of proceeds from the [spinout of its Diabetes business], and should support the +5.5% growth thesis going forward.”
Embecta became a public company in April. This was nearly a year after BD announced it would spin off the company.
The diabetes unit has a rich history that dates to 1924 when BD introduced the world’s first specialized syringe.
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