Baxter Announces Definitive Agreement to Divest Its Vantive Kidney Care Segment to Carlyle for $3.8 Billion
- Establishes Vantive as a leading standalone kidney care business backed by Carlyle’s global investment team and resources
- Sale follows robust process focused on maximizing stockholder value
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Provides increased flexibility to deploy capital toward opportunities to accelerate
Baxter ’s and Vantive’s respective growth objectives - Represents key milestone in Baxter’s ongoing business transformation, enabling heightened strategic clarity, operational efficiency and innovation
- Baxter shares preliminary outlook for select financial metrics following completion of pending Kidney Care divestiture
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Under the terms of the definitive agreement, subject to certain closing adjustments, Baxter will receive approximately
“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, better positioned to redefine healthcare delivery and advance innovation that benefits patients, customers and shareholders,” said
Vantive is a leader in global kidney care, offering products and services for peritoneal dialysis, hemodialysis and organ support therapies, including continuous renal replacement therapy (CRRT). The business has more than 23,000 employees globally and had 2023 revenues of
“I look forward to partnering with the combined
“The Atmas team is excited to support the growth of the Vantive business under the leadership of
“Vantive is a strong, growing business with market-leading franchises, and we are delighted to partner with the Vantive team to pursue their strategic vision through the separation from Baxter and transformation into a standalone global business,” said
Transaction Timing and Details
The transaction is expected to close in late 2024 or early 2025, subject to receipt of customary regulatory approvals and satisfaction of other closing conditions.
Baxter Highlights Preliminary Financial Expectations Following Pending Kidney Care Divestiture
Following the completion of the pending sale of Kidney Care, Baxter is targeting operational sales growth of 4% to 5% annually1 driven by innovation and continued market expansion. For 2025, the company anticipates an adjusted operating margin1 of approximately 16.5% on a continuing operations basis, which reflects an anticipated 100 basis point negative impact due to stranded costs, net of anticipated transition service agreement (TSA) income, and the manufacturing supply agreement (MSA) the company will enter into upon the completion of the divestiture of the Kidney Care segment. Baxter will continue to prioritize capital allocation and expects to direct investments toward higher-growth, higher-return opportunities to drive incremental value. To support these efforts, the company will continue to focus on deleveraging and expects to reach its investment-grade target of below 3.0X by the end of 2025, after utilizing proceeds from the sale of Kidney Care to repay outstanding debt, which may include repayment of its new bridge facility. Additionally, the company currently expects to fully offset stranded costs and loss of
Baxter plans to provide additional details regarding the company’s longer-term strategic and financial outlook at an investor conference in 2025. In addition, the company expects to post financial schedules reflecting the Kidney Care segment as a discontinued operation for certain historical periods prior to the release of its third-quarter 2024 earnings results.
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1 Operational sales growth and adjusted operating margin are non-GAAP financial measures. See the “Non-GAAP Financial Measures” section below for additional information.
About Baxter
Every day, millions of patients, caregivers and healthcare providers rely on Baxter’s leading portfolio of diagnostic, critical care, kidney care, nutrition, hospital and surgical products used across patient homes, hospitals, physician offices and other sites of care. For more than 90 years, we’ve been operating at the critical intersection where innovations that save and sustain lives meet the healthcare providers who make it happen. With products, digital health solutions and therapies available in more than 100 countries, Baxter’s employees worldwide are now building upon the company’s rich heritage of medical breakthroughs to advance the next generation of transformative healthcare innovations. To learn more, visit www.baxter.com and follow us on X, LinkedIn and Facebook.
About
Non-GAAP Financial Measures
This release contains certain forward-looking financial measures that are not calculated in accordance with
Targeted annual operational sales growth represents the company’s targeted future sales growth excluding sales to Vantive under the MSA and assuming foreign currency exchange rates remain constant in future periods. Targeted adjusted operating margin represents targeted adjusted operating income (operating income excluding special items that may occur during the forecast period) divided by targeted net sales.
Baxter has not provided reconciliations of targeted annual operational sales growth to a forward-looking estimate of annual GAAP sales growth or targeted adjusted operating margin to a forward-looking estimate of GAAP operating margin because the company is unable to predict with reasonable certainty the impact of legal proceedings, future business optimization actions, separation-related costs, integration-related costs, asset impairments, unusual gains and losses, and changes in foreign currency exchange rates, and the related amounts are unavailable without unreasonable efforts (as specified in the exception provided by Item 10(e)(1)(i)(B) of Regulation S-K). In addition, Baxter believes that such reconciliations would imply a degree of precision and certainty that could be confusing to investors. Such items could have a substantial impact on GAAP measures of financial performance.
Forward-Looking Statements
This press release contains forward-looking statements related to the proposed transaction between
Baxter is a registered trademark of
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Baxter Media
media@baxter.com
Brittany.Berliner@carlyle.com
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