Why C.R. Bard Shares Skyrocketed 19.5% Today

What happened

C.R. Bard (NYSE: BCR)stock soared 19.5% higher on Monday after medical supply giantBecton, Dickinson(NYSE: BDX)announced it's acquiring the company for about $24 billion in cash and stock.

So what

Becton, Dickinson will pay C.R. Bard investors $222.93 per share in cash plus 0.5077 shares of BDfor each share they own of C.R. Bard.

Image source: Getty Images.

It's an attractive deal for BD because it gives it exposure tovascular, urology, oncology, and specialty surgery markets that are growing due to a larger, longer-living, and wealthier global population.

The acquisition should accelerate BD's top- and bottom-line growth because C.R. Bard is growing more quickly (organically) than BD.

In 2016,C.R. Bard's sales increased 9% to$3.7 billion and its adjusted net income increased 12% to$777.3 million. In January, management told investors to expect sales to grow between 4% and 5% this year, and for adjusted EPS to grow to between $11.45 and $11.75, up from $10.29 in 2016.

For perspective, BD's pre-deal guidance for this fiscal year was for revenue to decrease 3.5% to 4% and for adjusted EPS of $9.35 to $9.45, up 9% to 10% versus fiscal 2016.

Now what

Once the deal is done, Becton, Dickinson thinks it can deliver revenue and cost synergies of $300 million annually in 2020. C.R. Bard's higher margins have management estimating that the deal will add 3% to gross margin, as well as boost its annual EPS growth into the teens.

C.R. Bard investors will have to decide if those estimates are good enough to convince them to stick around and own BD's shares, especially since BD is taking on $10 billion in debt to finance this deal.

10 stocks we like better than C.R. BardWhen investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and C.R. Bard wasn't one of them! That's right -- they think these 10 stocks are even better buys.

Click here to learn about these picks!

*Stock Advisor returns as of April 3, 2017

Todd Campbell has no position in any stocks mentioned.His clients may have positions in the companies mentioned.The Motley Fool recommends Becton Dickinson. The Motley Fool has a disclosure policy.