Baxter International today announced that it has signed a definitive agreement to divest its BioPharma Solutions business to Advent International, one of the largest global private equity investors, and Warburg Pincus, a global growth investor.
Under the terms of the definitive agreement, Baxter will receive $4.25 billion in cash, subject to certain closing adjustments, with net after-tax proceeds currently estimated to be approximately $3.4 billion. The transaction is expected to close in the second half of 2023, subject to receipt of customary regulatory approvals and satisfaction of other customary closing conditions. Baxter intends to utilize the after-tax proceeds to reduce its debt, consistent with the company’s stated capital allocation priorities. For the full fourth quarter 2023, Baxter estimates the transaction to result in dilution of approximately $0.10 per share to the company’s earnings, the total amount depending on the time of close. This amount is expected to be partially offset through reduced interest expense payments following anticipated debt repayment.
BPS has been a leading provider of sterile contract manufacturing solutions, parenteral delivery systems and customized support services to the pharma and biotech industries for decades. As a standalone company and in partnership with Advent and Warburg Pincus, BPS will operate as a premier, independent end-to-end CDMO providing a range of services for clients, from clinical research to commercial deployment. BPS should be well-positioned to accelerate its go-to-market strategy and clinical development pipeline, execute on throughput expansion and drive further product innovation. The proposed transaction includes BPS manufacturing facilities and approximately 1,700 employees in Bloomington, Indiana and Halle, Germany. BPS is expected to generate revenues of approximately $600 million on a reported basis for full year 2023.
For over 30 years, Advent has been investing in the healthcare sector. The firm has completed over 50 investments in 17 countries worldwide across a range of sub-sectors, including pharmaceuticals, life sciences and medical devices. Advent’s notable recent healthcare investments include Iodine Software and RxBenefits, and the firm’s recent notable global pharmaceutical services investments include BioDuro, GS Capsule, ICE Group, Suven Pharmaceuticals/Cohance Lifesciences, and Syneos Health.
Since inception, Warburg Pincus has invested over $16 billion in more than 180 healthcare companies, including Summit Health, Modernizing Medicine, Ensemble Healthcare Partners, and Global Healthcare Exchange, and has been an active investor in life sciences, with notable investments in Polyplus, Norstella, Sotera Health, and Bausch + Lomb, among others.
