BD is looking to dive into the growing market of automated hardware for dispensing medications in hospitals and retail pharmacies, and it’s paying $1.525 billion for the privilege.
The medtech company has signed up to buy Parata Systems from its corporate owner, the private equity firm Frazier Healthcare Partners, through an all-cash deal expected to close before next March, in the first half of BD’s 2023 fiscal calendar.
Based in Durham, North Carolina, Parata offers pharmacy workflow products for filling medication bottles and blister packs, printing packaging and patient dosing instructions and managing inventory and pick-up. This includes large, vending machine-like robots for dispensing, capping and sorting pills, as well as software programs for tracking barcoded canisters.
Over the 12 months leading up to the end of last March, Parata’s revenue reached about $220 million, gathered from more than 700 pharmacy customers, according to the companies.
BD estimates the total automation market currently tops out at about $600 million and expects it to grow about 10% annually in the U.S. alone, ultimately swelling to $1.5 billion in the next decade.
The company also cited “significant macro trends such as clinician shortages, wage inflation, centralization of pharmacy services and increased clinical demands on pharmacists,” such as performing vaccinations in the retail setting, as the main drivers of the need for automated dispensing systems.
Meanwhile, Parata said it expects high-throughput mail-order pharmacies to become a larger part of the future status quo, as patients look to cut down on in-person trips following the COVID-19 pandemic.
“Parata has a highly attractive financial profile and compelling value proposition that meets all of our rigorous investment criteria on growth, profitability and returns,” BD President and CEO Tom Polen said in a statement.
First founded in 2001, Parata was absorbed by Frazier’s pharmacy packaging-focused portfolio company TCGRx in late 2018, with the combined company taking over the Parata brand. The company’s portfolio will join up with BD’s current line of medication management products including health IT programs that connect with electronic medical records and track drug inventories.