Baxter to sell division for $4.2 billion

DEERFIELD - Baxter International Inc. Monday said 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 leading global growth investor.

Under the terms of the agreement, Baxter will receive $4.25 billion in cash, subject to certain closing adjustments, with net after-tax proceeds 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 said.

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 10 cents 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.

"Today represents an important step in Baxter's ongoing transformation journey as we continue to execute against our strategic priorities, enhance our focus and create additional value for all our stakeholders," said José "Joe" E. Almeida, chairman, president and chief executive officer at Baxter. "BPS has long been recognized worldwide as a trusted and preferred partner of contract manufacturing services for the pharmaceutical and biotech industries. Advent International and Warburg Pincus have extensive experience helping innovative health care companies advance their mission and strategic priorities."

BPS has been a leading provider of sterile contract manufacturing solutions, parenteral delivery systems and customized support services to the pharma and biotech industries. As a stand-alone company and in partnership with Advent and Warburg Pincus, BPS will operate as a independent, end-to-end contract development and manufacturing organization providing a range of services for clients, from clinical research to commercial deployment.