Baxter will receive after-tax proceeds of $3.4 billion, which it intends to use to pay down the debt the company incurred when it purchased medical device maker Hill-Rom Holdings for $10.5 billion in 2021. Baxter had a market value of $19 billion and total debt of $16.6 billion, as of Dec. 31.
Baxter estimates the transaction will reduce the company's
earnings by about $0.10 per share in the fourth quarter.
The medical device maker's biopharma solutions unit supports
drugmakers in the formulation, development and commercialization
of drugs typically given by infusion or injection, such as
vaccines.
Through the deal, Advent International and Warburg Pincus
will gain access to Baxter BioPharma solutions' manufacturing
facilities and about 1,700 employees in Bloomington, Indiana and
Halle, Germany.
Private-equity firms have increasingly been investing in the
drug development sector, which was deemed as risky, by coming up
with deals that compensate them for the uncertainty involved.
Through the deal with Baxter, which is expected to close in
the second half of 2023, the private-equity firms hope to
strengthen their presence in the contract drug manufacturing
space.
(Reporting by Khushi Mandowara and Bhanvi Satija in Bengaluru;
Editing by Krishna Chandra Eluri)
