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Becton Dickinson plans respiratory asset sale in wake of CareFusion merger

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Becton Dickinson ($BD) is reviewing its assets now that the $12.4 billion CareFusion deal closed last week. The $30 billion medical products and diagnostics company is expected to sell the respiratory device business that was formerly part of CareFusion, Bloomberg reports.

Vince Forlenza

The respiratory devices business could sell for $1.5 billion to $2 billion, according to the outlet. The asset sale process is said to be in an early stage. That would give the company cash that it could put toward the debt it accumulated doing the deal. Becton Dickinson took out $6.2 billion in debt to help finance the CareFusion deal. The company will owe $750 million in June 2016, with another $1.25 billion due in December 2017.

"We're conducting a strategic review of all of our businesses but haven't made any decisions," Kristen Cardillo, a spokeswoman for Becton Dickinson, told Bloomberg. But she wouldn't comment on the fate of any specific assets. Prior to the merger, the company already had some respiratory diagnostic products.

The respiratory business includes ventilators, breathing tubes and oxygen masks. CareFusion reported $191 million in respiratory revenues during the last half of 2014; that represented only a 4% improvement over the same period a year earlier. Overall, CareFusion had almost $2 billion in second-half 2014 revenues, with a growth rate of 14%.

Only one CareFusion business reported slower revenue growth than the respiratory unit during the second half of 2014. Infusion systems fetched $482 million in revenues--only a 3% increase from the previous period.

Former CareFusion chairman and CEO Kieran Gallahue gave a lukewarm review of the respiratory business during the company's most recent annual earnings call, saying "That's a business that we think performs reasonably well, grows with the market in the low single digits."

Ironically, CareFusion just entered into a deal with Breas Medical in February to market its ventilation equipment. The terms of the deal were undisclosed.

The aim of the CareFusion acquisition is to make Becton Dickinson more hospital-focused, particularly with a focus on medication management.

"The powerful combination of the two companies will further enable us to deliver end-to-end solutions that increase efficiencies, reduce medication errors and improve patient safety in both hospitals and pharmacies," said Vincent Forlenza, Becton Dickinson's chairman, president and CEO, on the company's February earnings call.

- here is the Bloomberg story

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