Business Context and Reporting Period
This Form 8-K, filed on May 5, 2017, by Becton, Dickinson and Company (BD), reports the execution of a definitive merger agreement with C. R. Bard, Inc. (Bard) dated April 23, 2017. Under the agreement, a BD subsidiary will merge with Bard, resulting in Bard becoming a wholly-owned subsidiary of BD. The filing also discloses the commencement of exchange offers for specific Bard debt securities on May 5, 2017.
Key Financial Metrics and Transaction Details
The filing does not provide specific revenue, profit, or cash flow figures for BD or Bard within the text of the report itself; these metrics are contained in the attached exhibits (Exhibits 99.1, 99.2, and 99.3). However, the filing details the following debt-related financial instruments involved in the transaction:
- Debt Exchange Offer: BD commenced offers to exchange Bard's outstanding notes for up to $1.15 billion in new BD notes and cash.
- Targeted Bard Notes:
- $500.0 million aggregate principal amount of 4.400% Notes due 2021.
- $500.0 million aggregate principal amount of 3.000% Notes due 2026.
- $149.82 million aggregate principal amount of 6.700% Notes due 2026.
- Pro Forma Information: Unaudited pro forma condensed combined financial information for the six-month period ended March 31, 2017, and the fiscal year ended September 30, 2016, is filed as Exhibit 99.3.
Material Changes and Transaction Structure
The primary material change is the proposed acquisition of Bard. The transaction structure involves:
- Merger Mechanics: Merger Corp (a BD subsidiary) will merge with and into Bard, with Bard surviving as a wholly-owned subsidiary of BD.
- Debt Restructuring: In conjunction with the exchange offers, BD is soliciting consents to amend Bard's indentures to eliminate substantially all restrictive covenants and limit reporting covenants to those required under the Trust Indenture Act of 1939.
Guidance, Risks, and Contingencies
The filing does not contain specific forward-looking guidance, management commentary on future earnings, or a detailed risk factor section within the text provided. The transaction is subject to the terms and conditions set forth in the Merger Agreement. The success of the debt exchange offer and the adoption of indenture amendments are contingent upon the acceptance by Bard's noteholders.
Investor Verification Checklist
- Review Exhibit 99.1 for Bard's audited financial statements for fiscal years 2014, 2015, and 2016 to assess historical performance.
- Review Exhibit 99.2 for Bard's unaudited financial statements for the three months ended March 31, 2017.
- Review Exhibit 99.3 for the unaudited pro forma combined financial information to understand the projected financial impact of the merger on BD.
- Review Exhibit 99.4 (Press Release) for additional details on the exchange offer terms and management's strategic rationale.
- Verify the specific terms of the debt exchange offer and the proposed indenture amendments to understand the impact on Bard's capital structure.