Becton Dickinson split its $3.4B life sciences arm days after Starboard's push

Becton Dickinson, the global medtech company behind syringes, catheters and diagnostics, ran essentially two businesses: a MedTech arm growing at mid-single digits but valued at 13-14 times EBITDA, and a Biosciences and Diagnostic Solutions arm growing more slowly yet carrying richer multiples. The whole company traded at about 16.8 times EBITDA — closer to the value of its least valuable part. BD had launched a portfolio evaluation of the mismatch in early 2024.

On February 3, 2025, Starboard Value announced it had taken a position in BD and called for separation of the life sciences division. Two days later, on February 5, BD's board unanimously authorized management to pursue exactly that: separating the Biosciences and Diagnostic Solutions business, which generated $3.4 billion in revenue. Chairman and CEO Tom Polen framed the move as doubling down on shifting the portfolio into higher-growth, higher-margin categories, both organically and through tuck-in M&A.

The exit route changed shape but not direction. On July 14, 2025, BD agreed to combine the unit with analytical-instrument maker Waters in a $17.5 billion Reverse Morris Trust: the business would be spun off tax-free to BD shareholders and merged with a Waters subsidiary, leaving BD holders with about 39.2% of the combined company and BD receiving a cash distribution of roughly $4 billion. Waters CEO Udit Batra would lead the combined company.

BD moved to separate the $3.4B-revenue life sciences unit; by July it agreed to a $17.5B merger with Waters, returning about $4B in cash to BD.

BD's two halves grew at different rates and were valued at different multiples, so the blended company sat near the valuation of its slower, less richly prized segment.

Starboard's public position gave the board an external mandate to execute a split its own portfolio review had already been circling since early 2024.

Separation lets BD concentrate capital on higher-growth, higher-margin medtech categories rather than averaging it across mismatched units.

The Reverse Morris Trust structure monetized the unit tax-efficiently while keeping BD shareholders 39.2% of the upside and bringing in about $4 billion of cash.

Conglomerate discounts are self-inflicted: when one unit trades at a structurally different multiple, separating them converts the valuation gap into shareholder value faster than any operating fix.

The Waters transaction was expected to close near the end of the first quarter of calendar 2026, subject to regulatory and Waters shareholder approvals. When completed, BD would become a pure-play MedTech company of four segments, while the biosciences and diagnostics business would continue inside a larger Waters-led life-sciences and tools platform in which former BD shareholders retain a minority stake.