5 Points About The Waters BD Unit Buy
Waters Is In IVD Now, and Other Thoughts
The mass spectrometer came into the IVD market a decade and a half ago. Now one could argue the mass spectrometry companies have officially followed. Waters Corporation announced it will merge with Becton Dickinson’s (BD) Biosciences and Diagnostic Solutions business in a transaction valued at $17.5 billion. Among other things, it puts Waters into a competitive position in IVD, especially infectious disease.
The deal, structured as a Reverse Morris Trust, involves Waters combining with the spun-off unit from BD, creating a new company focused on regulated, high-volume diagnostic and life science testing. BD’s divested business includes flow cytometry, microbiology, molecular diagnostics, clinical instruments, and related reagents and services.
Digression: Reverse Morris Trust, is, as I have recently learned, is the opposite of a Morris Trust where the parent company sheds a unit, keeping that unit out of the merger. It all stems from a 1966 tax court case where a Mary Archer W. Morris was the trustee and avoided taxes for the family trust with a sale. The important part of either Morris or its reversible twin, is avoiding taxes, which just sours a deal.
Back to this. So Waters has, shall we just say, purchased the Life Science Unit of BD, which the company in Feb. announced it was spinning off. BD retains 39.2% stake in the newly combined company, Waters shareholders will hold the remaining 60.8%. BD gets $4 billion in cash.
So a few points with that:
I didn't see anyone predict this. Thermo, Qiagen, Agilent, Bruker were on shortlists for the BD spinoff was announced, and it was possible the unit might have had to hang out a while for a buyer [ala Ortho], or sell subunits.
Waters is now "in" IVD. And high-growth IVD: infectious disease, blood bank, resp. infections. Hawt! It had watched its rival Bruker get into clinical diagnostics and likely (and I've heard stray comments) wanted to be more involved in IVD for some time. Now, I don't think entering IVD is the only reason. Given the opportunity BD gave them, it was a good time. Waters CEO Udit Batra cited "high volume" from "patient testing" as one of the key benefits of the merger.
BD did too many things for a healthcare equipment company in 2025, in my opinion. Too much to have sustained focus for success in either IVD or flow cytometry or single cell. It is going into medtech, also a huge and promising market and it's leadership is focused on surgery, medication delivery, and devices. This is as much about BD and medtech as it is about Waters and flow cytometry and IVD.
Waters’ total addressable market (TAM) increases to an estimated $40 billion. While exciting, this TAM of microbiology, single cell and clinical and non-clinical flow cytometry has competition not easily dislodged.
There will be talk of synergies, and new combined research/IVD products. Proteomics - getting to protein expression to solve disease. Who better than a mass spec company. I’m with you, brother. That’s exciting.
But there’s some plain old business here: Waters benefit here is increasing its percentage to a majority of recurring business versus one-time research sales, to be essential to the consistent volume - new therapies, patient visits, pill counts (flow cytometry platforms used in clinical trials, pharmacovigilance, and biologics manufacturing.)
essential, not specialty.
The deal is expected to close in the first quarter of calendar year 2026