Summary of Becton, Dickinson and Company (BDX) and Waters Corporation Conference Call Industry and Companies Involved - **Industry**: Life Sciences and Diagnostics - **Companies**: Waters Corporation and Becton, Dickinson and Company (BDX) Core Points and Arguments 1. **M&A Announcement**: Waters announced a combination with BD's Biosciences and Diagnostic Solutions business via a Reverse Morris Trust, with Waters issuing 39.2% of its shares to BD shareholders and assuming $4 billion in debt [3][6][44]. 2. **Financial Projections**: The combined company is expected to generate pro forma revenue of approximately $6.5 billion and adjusted EBITDA of around $2 billion for 2025 [7][19]. 3. **R&D Investment**: Approximately 10% of product sales will be allocated to R&D to sustain innovation [8][17]. 4. **Employee Count and Headquarters**: The combined entity will have around 16,000 employees and will be headquartered in Milford, Massachusetts [8]. 5. **Market Expansion**: The transaction is expected to double Waters' total addressable market to approximately $40 billion, with a focus on high-volume, regulated applications [9][12]. 6. **Revenue Stability**: Over 70% of the combined revenue is expected to be recurring, enhancing growth stability [10][11]. 7. **Cost and Revenue Synergies**: Expected cost synergies of $200 million by year three and revenue synergies of $290 million by year five [20][41]. 8. **Adjusted Operating Margin**: The combined company aims for an adjusted operating margin of approximately 32% by 2030, with an initial margin of 27% [19][43]. 9. **Strategic Fit**: The combination enhances capabilities in bioseparations, bioanalytical characterization, and multiplex diagnostics, leveraging both companies' strengths [15][36][38]. 10. **Customer Base**: The merger allows for cross-selling opportunities, particularly in flow cytometry and diagnostics, enhancing customer access and service offerings [56][91]. Additional Important Content 1. **Historical Growth**: Both companies have historically grown at mid-single-digit rates, with BD's bioscience and diagnostic solutions business having approximately 80% annual recurring revenue [18][19]. 2. **Innovation Pipeline**: BD's Biosciences is noted for its strong innovation pipeline in flow cytometry and microbiology, while Waters has a robust portfolio in chemistry and analytics [24][26][30]. 3. **Market Positioning**: The combined company is positioned to lead in life sciences tools, with a focus on regulated high-volume settings [47][48]. 4. **Regulatory and Market Access**: The merger is expected to enhance regulatory capabilities and market access for diagnostics, particularly in high-throughput labs [78][92]. 5. **Long-term Value Creation**: The transaction is described as transformational, aiming to create significant long-term value for shareholders, customers, and employees [47][48]. This summary encapsulates the key points from the conference call regarding the merger between Waters Corporation and BD's Biosciences and Diagnostic Solutions, highlighting the strategic, operational, and financial implications of the transaction.

Transaction Overview - BD will separate its Biosciences and Diagnostic Solutions business to BD shareholders and simultaneously merge SpinCo with a wholly owned subsidiary of Waters in a tax-efficient Reverse Morris Trust transaction valued at approximately $17.5 billion[65] - Expected pro forma ownership of 60.8% for Waters shareholders and 39.2% for BD shareholders[65] - BD to receive approximately $4 billion cash distribution via proceeds of SpinCo debt[65] - The transaction is expected to close around the end of the first quarter of calendar year 2026[65] Financial Highlights - Pro forma revenue for CY 2025E is approximately $6.5 billion[18] - Adjusted EBITDA for CY 2025E is approximately $2.0 billion[18] - R&D spending is approximately 10% of sales[18] - The transaction is expected to be EPS accretive in Year 1[36] - Expected revenue synergies of approximately $290 million by Year 5, with an EBITDA impact of $145 million[33, 61] - Expected cost synergies of approximately $200 million by Year 3[33, 61] - Approximately $345 million in total annualized adjusted EBITDA synergies are expected by Year 5[36, 61] Growth and Stability - The combined company will have a total addressable market (TAM) of approximately $40 billion with 5-7% market growth[19, 22] - Over 70% of revenue is annually recurring[19, 30] - Over 50% of instruments are replaced every 5-10 years[19, 30] - Expected sales growth in the near-to-mid-term is MSD-HSD (Mid-Single-Digit to High-Single-Digit)[33] - Adjusted operating margin expansion of approximately 500 bps is expected by 2030[33]

Transaction Overview - BD will separate its Biosciences and Diagnostic Solutions business to BD shareholders and simultaneously merge SpinCo with a wholly owned subsidiary of Waters in a tax-efficient Reverse Morris Trust transaction valued at approximately $17.5 billion[65] - Expected pro forma ownership of 60.8% for Waters shareholders and 39.2% for BD shareholders[65] - BD to receive approximately $4 billion cash distribution via proceeds of SpinCo debt[65] - The transaction is expected to close around the end of the first quarter of calendar year 2026[65] Financial Highlights - Pro forma revenue for CY 2025E is approximately $6.5 billion[18] - Adjusted EBITDA for CY 2025E is approximately $2.0 billion[18] - R&D spending is approximately 10% of sales[18] - The transaction is expected to be EPS accretive in Year 1[36] - Expected revenue synergies of approximately $290 million by Year 5, with an EBITDA impact of $145 million[33, 61] - Expected cost synergies of approximately $200 million by Year 3[33, 61] - Approximately $345 million in total annualized adjusted EBITDA synergies are expected by Year 5[36, 61] Growth and Stability - The combined company will have a total addressable market (TAM) of approximately $40 billion with 5-7% market growth[19, 22] - Over 70% of revenue is annually recurring[19, 30] - Over 50% of instruments are replaced every 5-10 years[19, 30] - Expected sales growth in the near-to-mid-term is MSD-HSD (Mid-Single-Digit to High-Single-Digit)[33] - Adjusted operating margin expansion of approximately 500 bps is expected by 2030[33]

Core Viewpoint - Waters Corporation and BD have announced a definitive agreement to combine BD's Biosciences & Diagnostic Solutions business with Waters, creating a leading entity in life sciences and diagnostics valued at approximately $17.5 billion [1][2]. Strategic and Financial Benefits - The transaction is expected to create substantial shareholder value through a strong strategic fit, increasing Waters' total addressable market to approximately $40 billion with an annual growth rate of 5-7% [2][3]. - Pro forma expected sales for the combined company in 2025 are approximately $6.5 billion, with adjusted EBITDA around $2.0 billion [2][9]. - The combined entity anticipates over 70% of its revenue to be recurring, with significant contributions from market-leading brands [2][3]. - Expected annualized EBITDA synergies of approximately $345 million by 2030, including $200 million in cost synergies by year three and $290 million in revenue synergies by year five [2][4]. - The transaction is projected to be accretive to adjusted EPS in the first year, with mid-to-high single-digit revenue growth and mid-teens annualized adjusted EPS growth expected over five years [2][9]. Technological and Market Expansion - The merger will bring together complementary technologies, enhancing capabilities in high-volume testing across regulated markets, including liquid chromatography and mass spectrometry [3][4]. - The combined company aims to accelerate expansion into high-growth adjacent markets, leveraging Waters' chemistry expertise and BD's biologics knowledge [3][4]. - BD's regulatory expertise is expected to enhance market access and service support, particularly in multiplex diagnostics using Waters' technologies [3][4]. Management and Governance - Udit Batra, Ph.D., will lead the new entity, with key leadership roles filled by executives from both companies [11][12]. - The combined company will operate under the Waters name and maintain its listing on the New York Stock Exchange [12]. Financial Structure and Transaction Details - The transaction is structured as a Reverse Morris Trust, with BD shareholders expected to own approximately 39.2% of the combined company and Waters shareholders approximately 60.8% [10]. - BD will receive a cash distribution of approximately $4 billion prior to the completion of the combination [10]. - The transaction is expected to close around the end of the first quarter of 2026, pending regulatory approvals and other customary conditions [10].

Company Overview - Waters Corporation (NYSE:WAT) is a global leader in analytical instruments, separations technologies, and software, serving various sectors including life sciences, materials, food, and environmental sciences for over 65 years [2] - The company ensures the efficacy of medicines, safety of food, purity of water, and quality and sustainability of everyday products [2] - Waters Corporation operates in over 100 countries with a workforce of more than 7,600 employees [2] Upcoming Financial Events - Waters Corporation will hold its Q2 2025 financial results conference call on August 4th, 2025, at 8:00 a.m. Eastern Time [1] - A live webcast of the presentation will be available on the Waters Investor Relations website, with a replay accessible until at least September 2nd, 2025 [1]

Core Insights - Zacks Premium provides various tools to enhance stock market investment confidence and effectiveness [1][2] - The Zacks Style Scores are designed to help investors select stocks with the highest potential to outperform the market in the short term [3] Zacks Style Scores Overview - The Style Scores categorize stocks into four types: Value Score, Growth Score, Momentum Score, and VGM Score, each focusing on different investment strategies [4][5][6][7] - Value Score emphasizes identifying undervalued stocks using financial ratios [4] - Growth Score focuses on a company's future earnings and financial health [5] - Momentum Score capitalizes on existing price trends and earnings outlook [6] - VGM Score combines all three styles to provide a comprehensive assessment of stocks [7] Zacks Rank and Performance - The Zacks Rank is a proprietary model that uses earnings estimate revisions to assist in portfolio building [8] - Stocks rated 1 (Strong Buy) have historically achieved an average annual return of +25.41% since 1988, significantly outperforming the S&P 500 [9] - There are over 800 top-rated stocks available, making it essential to utilize Style Scores for effective selection [10] Investment Strategy Recommendations - For optimal returns, investors should focus on stocks with a Zacks Rank of 1 or 2 and Style Scores of A or B [11] - Stocks with a 3 (Hold) rank should also have A or B Scores to maximize upside potential [11] - The direction of earnings estimate revisions is crucial when selecting stocks, as declining forecasts can negatively impact share prices [12] Company Spotlight: Waters Corp. (WAT) - Waters Corp. is an analytical instrument manufacturer providing sustainable products for laboratory organizations [13] - Currently rated 3 (Hold) with a VGM Score of A, WAT has a Momentum Style Score of A and has seen a 2.2% increase in shares over the past month [13][14] - Recent upward revisions in earnings estimates for fiscal 2025 indicate positive momentum, with the Zacks Consensus Estimate rising by $0.06 to $12.90 per share [14]

Core Viewpoint - The revenue of multinational instrument companies in China has generally declined in 2024, with only Merck achieving growth, while many companies have experienced consecutive declines over the past two years due to multiple factors including US-China trade tensions, economic environment, and market competition [1][2]. Revenue Performance Summary - In 2024, Merck led the revenue rankings in China with $32.98 billion, marking a 5.8% increase after a 14.2% decline in 2023 [5][6]. - Danaher followed with $28.05 billion, down 10.8%, continuing a downward trend from $31.43 billion in 2023, which was a 13.0% decrease [6][8]. - Agilent ranked third with $12.20 billion, a decline of 11.6%, following a 7.9% drop in 2023 [7][8]. - Shimadzu and Mettler-Toledo ranked fourth and fifth with revenues of $6.30 billion and $6.22 billion, respectively, both experiencing declines [8]. - Overall, over 80% of the listed companies saw a year-on-year revenue decrease in 2024, with some companies facing declines for two consecutive years [8][14]. Market Share Analysis - The market share of many companies in China has also shown a downward trend, reflecting poor performance and indicating a relative decline in market vitality compared to global markets [9]. - In 2024, Agilent's market share in China was 18.74%, down from over 20% in previous years, indicating a significant drop [9]. Company-Specific Insights - Danaher reported that approximately 12% of its sales come from China, highlighting the potential adverse effects of the political, economic, and regulatory environment on its business [11]. - Waters experienced a notable 30% decline in sales in China, attributed to decreased demand across various customer categories due to economic conditions and trade tensions [12]. - Agilent's revenue decline was primarily driven by pressures in capital spending from clients, particularly in the pharmaceutical market [12]. - Mettler-Toledo emphasized the importance of the Chinese market, which accounted for 16% of its external sales, and noted the impact of geopolitical tensions and economic pressures on its performance [13]. Strategic Adjustments - In response to market changes, multinational companies are accelerating strategic adjustments, increasing investment in local R&D, and launching products tailored to local needs [15]. - Despite the challenges faced from 2022 to 2024, the long-term potential of the Chinese market remains significant, and companies are expected to adapt more flexibly and innovatively to maintain competitiveness [15].

Group 1 - U by Kotex® has partnered with Anna Leigh Waters, the number one pickleball player, to challenge the stigma surrounding menstruation in sports [1][2][3] - A study indicates that some women's mental agility may improve during menstruation, with faster reaction times and better accuracy [2] - More than 84% of teenage girls aged 11-16 report a decrease in interest in sports after starting their period, and nearly 25% feel embarrassed to participate in physical activities during their menstrual cycle [3] Group 2 - The partnership aims to empower women to continue participating in sports regardless of their menstrual cycle, promoting the message that periods should not hinder athletic performance [3][4] - U by Kotex® emphasizes the importance of showcasing female athletes' resilience and strength, aligning with their mission to normalize conversations about menstruation in sports [4]

Group 1: Zacks Style Scores Overview - Zacks Style Scores are indicators that help investors select stocks with the best chances of outperforming the market over the next 30 days, rated from A to F based on value, growth, and momentum characteristics [2][9] - The Style Scores are categorized into four types: Value Score, Growth Score, Momentum Score, and VGM Score, each focusing on different investment strategies [3][4][5][6] Group 2: Value Score - The Value Score identifies attractive and discounted stocks using ratios like P/E, PEG, Price/Sales, and Price/Cash Flow, appealing to value investors [3] Group 3: Growth Score - The Growth Score assesses a company's future prospects and financial health, analyzing projected and historical earnings, sales, and cash flow to identify stocks with sustainable growth [4] Group 4: Momentum Score - The Momentum Score focuses on trends in stock price or earnings outlook, helping investors identify optimal times to build positions based on price changes and earnings estimate shifts [5] Group 5: VGM Score - The VGM Score combines all three Style Scores, providing a comprehensive indicator that evaluates stocks based on value, growth, and momentum [6] Group 6: Zacks Rank and Performance - The Zacks Rank is a proprietary stock-rating model that utilizes earnings estimate revisions to assist investors in building successful portfolios, with 1 (Strong Buy) stocks yielding an average annual return of +25.41% since 1988, significantly outperforming the S&P 500 [7][8] - To maximize returns, investors should focus on stocks with a Zacks Rank of 1 or 2 and Style Scores of A or B [9] Group 7: Company Spotlight - Waters Corp. - Waters Corp., based in Milford, MA, is an analytical instrument manufacturer providing sustainable products for laboratory organizations, specializing in mass spectrometry and liquid chromatography [11] - Waters has a Zacks Rank of 3 (Hold) and a VGM Score of B, with a Growth Style Score of A, indicating a year-over-year earnings growth forecast of 8.6% for the current fiscal year [11][12] - Recent upward revisions in earnings estimates by four analysts for fiscal 2025 have increased the Zacks Consensus Estimate by $0.04 to $12.88 per share, with an average earnings surprise of 4% [12]

Core Insights - Jackpot Digital Inc. has successfully installed two additional Jackpot Blitz® electronic table games at Northern Waters Casino Resort, enhancing its poker offerings [1][2][3] - The response to the Jackpot Blitz® games has been highly favorable, leading to the expansion of the poker room from two to four tables [2][3] - The company aims to strengthen its presence in the land-based casino gaming industry by providing innovative and engaging poker ETGs [4][6] Company Overview - Jackpot Digital Inc. specializes in dealerless electronic poker table games, offering solutions that are efficient and cost-effective for casino operators [8] - The company is committed to enhancing player experiences and optimizing gaming offerings for operators [8] - Jackpot Digital has established a presence in various jurisdictions, including multiple states in the U.S. and international markets [7]