Axios Pro Exclusive Content

BD enters pharmacy automation with $1.525B Parata buy

Sarah Pringle
Jun 6, 2022
Illustration of a robot arm dropping a pill into a prescription bottle.

Illustration: Gabriella Turrisi/Axios

Becton Dickinson is buying Parata Systems from Frazier Healthcare Partners for $1.525 billion in all cash.

Why it matters: The deal allows the medical technology giant to enter the pharmacy automation market, a space seeing strong growth as both established pharmacies and new digital-first entrants look to modernize workflow to improve efficiencies and cut costs.

  • The $600 million U.S. pharmacy automation market is expected to grow about 10% annually to $1.5 billion in the next decade, per a BD investor report.
  • Wage inflation and a shortage of pharmacists, central-fill pharmacies' increasing reliance on automation, and the proliferation of VC-backed digital pharmacies are fueling the sector's growth.

Behind the scenes: Axios wrote in January that Frazier Healthcare, five years into its investment, had engaged Baird and William Blair to explore strategic alternatives for Parata.

  • Sources said then that Durham, North Carolina-based Parata would make a great private equity deal, is a logical M&A target for publicly traded strategics like Omnicell, or might even consider a go-public route.

By the numbers: Sources more recently told Axios the process marketed EBITDA figures in the $55 million to $70 million range, suggesting a multiple well into the 20x-plus range.

  • BD declined to comment and Frazier didn't immediately return a request for comment.

How it works: Parata offers all the technology and tools that it takes to run a fully automated pharmacy.

  • That includes everything from medication adherence packaging to high-speed robotic dispensing technologies and pharmacy workflow solutions. It also provides data for pharmacists.

Details: Parata's technology is sold to both the incumbents and emerging players.

  • That includes the big box retail and long-term care pharmacies, as well as virtual pharmacy startups like Hims & Hers or Amazon Pharmacy, and the direct-to-home market.

The bottom line: Parata aligns with BD's growth strategy around what CEO Tom Polen says is "smart, connected care and enabling new care settings."

Go deeper