Activist hedge fund Starboard Value has taken a stake in Becton Dickinson (BD) and is pushing the $72bn medical technology company to sell or spin off its life sciences division, according to a report by Reuters citing unnamed sources familiar with the matter.
The hedge fund has met with BD’s management team and sent a letter to the board, urging the company to separate the unit, which produces clinical and research laboratory products. The exact size of Starboard’s stake remains unclear.
BD’s shares have lagged behind competitors and the S&P 500, gaining just 4.4% over the past year, compared to the index’s 22% rise. News of Starboard’s stake sent BD shares up by as much as 3% in pre-market trading.
The New Jersey-based company is already working with financial advisers on a potential spin-off of its life sciences business, which could be valued at $33bn to $35bn, based on industry peer comparisons. Bloomberg was first to report BD’s hiring of advisers.
Other shareholders have also been pushing for a separation, but Starboard’s involvement is expected to accelerate the process, according to the sources. The life sciences unit generated $5.2bn in revenue in the fiscal year ending September 2024, accounting for about a quarter of BD’s total revenue.
Neither Becton Dickinson nor Starboard provided a comment.
Starboard Value, led by Jeff Smith, is one of Wall Street’s most high-profile activist investors, with over $9bn in assets under management. The firm has previously targeted Salesforce and Match Group and recently expanded its focus on healthcare companies.
In October, Starboard disclosed a $1bn stake in Pfizer, following the pharmaceutical giant’s stock decline post-Covid vaccine boom. The hedge fund also took a position in Kenvue, the Tylenol maker spun off from Johnson & Johnson, later nominating five directors to its board.