Waters and BD Join Forces to Create Life Science and Diagnostics Powerhouse in $17.5 Billion Reverse Morris Trust Deal
MILFORD, Mass., and FRANKLIN LAKES, In a move poised to reshape the landscape of life sciences and diagnostics, Waters Corporation (NYSE: WAT) and BD (Becton, Dickinson and Company) (NYSE: BDX) have entered into a definitive agreement to merge BD’s Biosciences & Diagnostic Solutions business with Waters. This strategic combination will establish a global leader in high-volume, regulated testing with a diversified portfolio of cutting-edge technologies. The merger is structured as a tax-efficient Reverse Morris Trust transaction, assigning the combined entity a valuation of approximately $17.5 billion.
Strategic Synergy to Drive Innovation and Market Leadership
At the heart of this combination is the blending of two complementary organizations, bringing together industry-leading strengths in liquid chromatography, mass spectrometry, flow cytometry, and diagnostic solutions. The merger is expected to double Waters’ total addressable market (TAM) to nearly $40 billion, positioning the new entity at the forefront of numerous regulated and rapidly expanding end-markets.
Over 70% of the merged company’s revenues are projected to be recurring, driven by services, consumables, and software, and more than half of its instrument revenues are expected to recur over standard five- to ten-year upgrade cycles. This robust revenue model enhances the financial stability and visibility of the combined company.
The integration is also set to broaden Waters’ presence in high-growth adjacent areas, particularly in bioseparations and bioanalytical characterization. By merging BD’s biologics capabilities with Waters’ strong foundation in chemistry, the company aims to develop next-generation consumables and separation technologies for large molecules—crucial for biologics and emerging modalities.
In the bioanalytical characterization space, BD’s advanced flow cytometry and PCR technologies will be combined with Waters’ Empower™ informatics platform and downstream applications expertise, creating a powerful toolkit for quality assurance and quality control (QA/QC) of large molecule therapeutics.
Waters will also benefit from BD’s established regulatory and commercial foothold in clinical and diagnostic environments. This will accelerate Waters’ penetration into regulated diagnostics markets and enable rapid menu expansion, automation, and enhanced service for multiplex diagnostics using Waters’ LC-MS platforms.
Unlocking Operational and Financial Synergies
The transaction is projected to generate meaningful cost and revenue synergies. By the third year post-closing, cost synergies are anticipated to reach $200 million, stemming from optimization in manufacturing, supply chain, and SG&A efficiencies, without compromising R&D and commercial investments. Revenue synergies could add approximately $290 million by year five, driven by commercial excellence, access to new high-growth adjacencies, and cross-selling initiatives. Together, these synergies are expected to result in approximately $345 million of annualized EBITDA gains by 2030.
The combined entity is projected to post pro forma revenues of about $6.5 billion and adjusted EBITDA of approximately $2.0 billion in calendar year 2025. Between 2025 and 2030, the company expects to deliver mid-to-high single-digit annual revenue growth and mid-teens adjusted EPS growth. By 2030, the new entity is forecast to achieve $9 billion in revenue, $3.3 billion in adjusted EBITDA, and an adjusted operating margin of 32%, reflecting one of the strongest growth profiles in the sector.
Leadership Perspective
Waters executives emphasized the transformative nature of the deal. Flemming Ornskov, M.D., M.P.H., Chairman of Waters, called it “a pivotal milestone” in Waters’ strategic journey, highlighting its alignment with the company’s long-term growth vision.
Waters CEO Udit Batra, Ph.D., who will lead the new combined entity, noted the significant opportunities ahead: “We are combining two highly innovative, customer-centric organizations. This transaction doubles our accessible market and allows us to capitalize on several high-growth adjacencies, particularly in bioseparations and multiplex diagnostics.”
BD Chairman and CEO Tom Polen echoed the enthusiasm, saying, “We’re creating an industry-leading diagnostics and life sciences company by bringing together two portfolios that naturally complement each other. Under Udit’s leadership, we believe this combination offers the best path to value creation for our shareholders and unmatched growth potential.”
The transaction also reinforces BD’s strategic focus on becoming a more streamlined and focused medical technology company. BD will receive a cash distribution of approximately $4 billion, which it plans to use for share repurchases and debt reduction.
Structure and Timing
The Reverse Morris Trust structure involves spinning off BD’s Biosciences & Diagnostic Solutions unit to BD shareholders, followed by its merger with a Waters subsidiary. After completion, BD shareholders will own approximately 39.2% of the combined company, while existing Waters shareholders will retain 60.8%. Waters is expected to assume approximately $4 billion in additional debt, resulting in a leverage ratio of 2.3x net debt-to-adjusted EBITDA.
The transaction is subject to Waters shareholder approval, regulatory clearances, and other customary closing conditions. It is anticipated to close by the end of Q1 2026.
Leadership and Governance
Udit Batra will serve as CEO of the combined entity, and Amol Chaubal will assume the role of Chief Financial Officer. Leadership roles will be drawn from both companies, with up to two directors from BD joining Waters’ Board. The merged organization will operate under the Waters name, remain listed on the NYSE under the WAT ticker, and be headquartered in Milford, Massachusetts. BD’s current Biosciences & Diagnostic Solutions operations will also continue to have a significant presence.
Overview of BD’s Contributing Business
BD’s Biosciences unit is renowned for its leadership in immunology and cancer research, particularly through flow cytometry and multiomics. The Diagnostic Solutions arm brings deep capabilities in molecular diagnostics, microbiology, cervical cancer screening, and point-of-care testing. Together, they generated approximately $3.4 billion in revenue and $925 million in adjusted EBITDA in 2025.
Advisors and Shareholder Communication
Waters is being advised by Barclays and legal counsel Kirkland & Ellis LLP. BD is being advised by Citi and Evercore, with Wachtell, Lipton, Rosen & Katz as lead legal counsel.
With this transformative merger, Waters and BD are creating a life science and diagnostics powerhouse built for the future—one that blends innovation, scale, and financial strength to address the most pressing needs of the global healthcare ecosystem.
