Tyco to Buy Medical Device Maker Bard for $3.2 Billion

EXETER, N.H. —  In another major medical products deal Wednesday, Tyco International Ltd. agreed to buy C.R. Bard Inc. for about $3.2 billion, giving Tyco catheters, hernia-repair devices and other medical items it can team with the surgical balloons and instruments it already sells.

Tyco, the second-biggest maker of health-care supplies behind Johnson & Johnson, will pay $60 in stock for each share of Bard--a 30% premium to Bard’s share price Tuesday.

The news sent Bard’s shares soaring $10.09, or 22%, to $56.09 on the New York Stock Exchange. Tyco shares eased 70 cents to $56.30, also on the NYSE.

Medical supplies made up $6.47 billion of conglomerate Tyco’s $28.9 billion in sales last year. Tyco also owns such medical brands as Kendall and U.S. Surgical.

Bard, based in Murray Hill, N.J., had sales last year of $1.1 billion.

The deal will add about 5 cents a share to Tyco’s profit in the first year, Chief Executive Dennis Kozlowski said.

Most of Bard’s sales are to U.S. firms and hospitals. By comparison, about 35% of Tyco’s medical sales are foreign. Tyco said it expects to boost Bard’s foreign sales.

Tyco won’t reduce Bard’s research budget, but it will cut about $235 million in other costs.

Bard already had planned to shut 12 of 21 manufacturing sites, Kozlowski said. In January, Bard said plant closings over three years would save $40 million to $60 million before taxes annually.

“Bard was ready to undertake some massive changes in consolidation of facilities,” Kozlowski said. “I think the board felt it was a good time to consider a sale.”

“Bard is the kind of quality asset that Tyco shareholders are going to like since it doesn’t have the need for a major make-over,” said John Hayes, an analyst at Independence Investment Associates, which owns Tyco shares.

Tyco also is the biggest maker of electronic connectors, undersea fiber-optic cable and security and fire prevention systems.