Becton Set for Acquisition

Becton, Dickinson and Company (BDX - Analyst Report) is set to acquire HandyLab Inc., an Ann Arbor, Michigan-based company that develops and manufactures automation platforms and molecular diagnostic assays. The acquisition is expected to close by the year end. Financial terms of the deal have not been disclosed.

Becton had already entered into a development and distribution agreement with HandyLab in May 2009. The acquisition thus enables Becton to support its molecular diagnostics strategy by accessing the HandyLab instrumentation technology, which is considered to be an industry leading molecular diagnostic automation platform. Becton plans to utilize its BD GeneOhm molecular assays onto the HandyLab platform and market it as the new BD Max system.

The acquisition will boost demand for Becton’s molecular diagnostic products that will eventually drive the company’s top-line. Becton, Dickinson and Company develops, manufactures and markets medical devices, supplies, laboratory equipment and diagnostic products globally. The company is a world leader in safety needle products.

Becton competes with players like Baxter International (BAX - Analyst Report), Johnson & Johnson (JNJ - Analyst Report) and Abbott Laboratories (ABT - Analyst Report), all of which have large resources.

We believe that the company’s sound business model and product line should weather the current economic turbulence, and is capable of withstanding competitive pressure. Based on the company’s performance in the third quarter of fiscal 2009, we have a ‘Neutral’ recommendation on Becton stock.