Dive Brief:
- Baxter has agreed to sell its Vantive kidney care business to private equity firm Carlyle Group for $3.8 billion, the companies said Tuesday. Carlyle is partnering with Atmas Health in the investment.
- Carlyle formed Atmas Health in 2022 with healthcare executives Kieran Gallahue, Jim Hinrichs and Jim Prutow to focus on acquiring assets in the medical technology, life science tools and diagnostics sectors. Gallahue will become chairman of Vantive, working with Vantive CEO Chris Toth.
- Baxter will target annual operational sales growth of 4% to 5% after the Vantive transaction is complete.
Dive Insight:
Baxter originally planned to spin off Vantive as an independent publicly traded company before switching gears and disclosing in March that it was talking with unnamed private equity investors about a potential sale. The Wall Street Journal reported Baxter had begun exclusive negotiations with Carlyle in late June.
Baxter said its management and board determined the sale to Carlyle should maximize value for shareholders and give the company more flexibility to use capital to pursue opportunities to accelerate growth.
"Today's announcement represents another critical step forward in the strategic transformation process we announced in early 2023. As a result of this proposed transaction, Baxter will emerge a more focused and more efficient company,” Baxter CEO José Almeida said in the statement.
Vantive provides acute and chronic dialysis therapies. The business generated about $4.45 billion in sales in both 2022 and 2023, contributing nearly a third of Baxter’s total revenue. It has more than 23,000 employees.
“This definitive agreement brings a multi-decade renal-focused chapter in Baxter's corporate history to an end, setting the stage positively for a more-streamlined and even more operationally-minded [company],” Stifel analysts wrote in a Tuesday note to investors.
Baxter last year sold its biopharma solutions business to Warburg Pincus and Advent International for $4.25 billion as it continued a broader restructuring that included streamlining nine business segments into four.
The Deerfield, Illinois-based company will have three remaining global business units after the Vantive sale: medical products and therapies, healthcare systems and technologies, and pharmaceuticals. Heather Knight leads medical products and therapies, Reaz Rasul heads healthcare systems and technologies, and Alok Sonig oversees the pharma business.
The sale of Vantive to Carlyle is expected to close in late 2024 or early 2025.
Baxter’s stock price was down more than 6% at $34.65 in midday trading Tuesday.
