Baxter finds a $4.3bn biopharma solution

Having announced the spinout of its renal care and acute therapies units in January, Baxter now plans to slim further with the sale of its biopharma solutions business to private equity for $4.3bn in cash. The buyers, Warburg Pincus and Advent International, will get a company specialising in sterile contract manufacturing and parenteral drug delivery systems that is expected to bring revenues of around $600m this year. This is down from the $644m the unit turned over last year – around 4% of Baxter’s total sales. Baxter will get $3.4bn in net proceeds, which ought to alleviate concerns over its ability to meet sizable near-term debt payments, Stifel analysts write. Overall, Baxter has outstanding debt of around $16bn. Following the three planned divestments Baxter’s revenues will shrink by around a third, with its largest remaining businesses being medication delivery, which largely deals with IV administration, and pharmaceuticals, which covers oncology drug platforms, inhaled anaesthesia and pharmacy compounding services. Beyond Baxter, divestments are also on the cards for five more healthcare groups, including Medtronic and Novartis. And Perkinelmer today relaunched itself under a new name – Revvity – having sold off its applied, food and enterprise services two months ago. 

Healthcare divestmania in 2023 and beyond
Parent Unit/new company Type of deal Focus Date
General Electric GE Healthcare Spinout via IPO Medtech 4 Jan 2023
Revvity* Perkinelmer Sale to private equity (New Mountain Capital) Applied, food and enterprise services businesses 13 Mar 2023
Medtronic Mozarc Medical Spinout into joint venture with Davita Renal care 1 Apr 2023
Olympus Evident Sale to private equity (Bain Capital) Microscopy 3 Apr 2023
Johnson & Johnson Kenvue Spinout via IPO Consumer care 4 May 2023
3M As-yet unnamed Spinout via IPO Medtech Expected 2023
Labcorp Fortrea Spinout via IPO Clinical development Expected mid-2023
Novartis Sandoz Spinout via IPO Generics Expected H2 2023
Danaher Veralto Spinout via IPO Environmental Expected Q4 2023
Medtronic As-yet unnamed Spinout via IPO Patient monitoring and respiratory interventions  Expected late 2023 to early 2024
Baxter International BioPharma Solutions business unit Sale to private equity (Warburg Pincus/Advent Investment) Contract manufacture and drug delivery Expected H2 2023
Baxter International Renal Care and Acute Therapies business units Spinout via IPO Renal and acute therapies Expected H1 2024
*Perkinelmer sold its applied, food and enterprise services, with the divested unit taking the Perkinelmer name; Revvity is the new name for the remnant of Perkinelmer. Source: Evaluate Medtech & company communications.

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