US-based medical technology firm Baxter International has agreed to sell its kidney-care segment, to be known as Vantive, to private equity firm Carlyle Group in a deal worth $3.8bn.
Vantive provides products and services for haemodialysis, peritoneal dialysis and organ support therapies, including continuous renal replacement therapy (CRRT).
The kidney-care unit generated revenues of $4.5bn in 2023 and employs more than 23,000 people around the world.
Under the deal, the medical technology firm will receive about $3.5bn in cash with net after-tax proceeds currently projected to be about $3bn.
Baxter plans to use after-tax proceeds from the sale to reduce its debt, in line with its stated capital allocation priorities.
In January last year, Baxter announced its plan to establish a standalone kidney care company as part of a broader strategic realignment aimed at improving future performance and creating value for all stakeholders.
In March this year, Baxter announced that it was in discussions to explore the potential sale of the kidney-care unit.
Last month, Baxter said it was in talks to sell its kidney-care spin-off Vantive to Carlyle Group.
Carlyle healthcare global co-head Robert Schmidt said: “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.”
Additionally, Carlyle’s investment in Vantive is in partnership with Atmas Health, a collaboration founded in September 2022 by three industry executives focused on acquiring and building a leading healthcare business.
The partnership, which includes Kieran Gallahue, Jim Hinrichs, and Jim Prutow, brings a strong track record of value creation in the medical technology industry.
Baxter executive vice president and kidney care group president Chris Toth will serve as the CEO of Vantive.
Gallahue will serve as the chairman of Vantive, working with CEO Toth and the Vantive management team.
Baxter chairman, president and CEO José Almeida said: “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.
“I am confident that, under Carlyle’s stewardship and Chris Toth’s leadership, the Vantive team will continue to build on the business’s 70-year legacy as a pioneer in kidney disease and vital organ therapies.”
The deal is anticipated to close later this year or early 2025, subject to receipt of customary regulatory approvals and satisfaction of other closing conditions.
Perella Weinberg Partners and J.P. Morgan Securities are serving as financial advisors, and Sullivan & Cromwell and Baker McKenzie are acting as legal advisors to Baxter on the transaction.
Barclays and Goldman Sachs are serving as financial advisors, and Kirkland & Ellis LLP is acting as legal counsel to Carlyle on the deal.
