ICU Medical Purchasing Hospira Infusion Systems Business from Pfizer for $1 Billion

ICU Medical Inc. is purchasing the Hospira Infusion Systems business from Pfizer Inc. for $1 billion in cash and stock. The Hospira Infusion Systems business includes IV pumps, solutions, and devices that, when combined with ICU Medical’s existing businesses, will create a leading pure-play infusion therapy company, with estimated pro forma combined revenues of approximately $1.45 billion based on trailing 12 month results as of June 2016.
 
Under the terms of the agreement, Pfizer will receive approximately $400 million in newly issued shares of ICU Medical common stock and $600 million in cash. Upon completion of the transaction, which the companies expect to occur in the first quarter of 2017 subject to customary closing conditions including required regulatory approvals, Pfizer will own approximately 16.6 percent of ICU Medical. In addition, as long as Pfizer continues to hold 10 percent or more of ICU Medical’s common equity, it will have the right to nominate one member to the company’s board of directors in ICU Medical’s proxy materials, and Pfizer has agreed to certain restrictions on transfer of its shares for at least 18 months.
 
“We are pleased that Hospira Infusion Systems is combining with ICU Medical, and we believe the combined company will be well positioned in the marketplace to deliver value to customers through its strong product portfolio and the expertise of colleagues from both companies. I’m proud of the Hospira Infusion Systems team and their positive impact on patients around the world,” said John Young, group president of Pfizer Essential Health.
 
The acquisition complements ICU Medical’s existing business by creating a company that has a complete IV therapy product portfolio from solutions to pumps to non-dedicated infusion sets, and gives the firm a significantly enhanced global footprint and a platform for continued competitiveness and growth, according to executives. With an integrated product offering, ICU Medical will hold leading positions in key segments and have access to the full U.S. infusion marketplace with a full product portfolio.
 
“The combination of these two businesses is the natural evolution of a productive relationship that began more than 20 years ago when Hospira began integrating ICU Medical’s needlefree technology into their infusion offering globally,” explained Vivek Jain, ICU Medical’s CEO. “By acquiring the Hospira Infusion Systems business, currently our largest single customer, we create a pure-play infusion business with the focus and scale to compete globally, eliminate our single customer concentration issue, and have a significant value creation opportunity as a much larger company. We look forward to serving more customers as we continue to bring clinical and economic value to the marketplace.”
 
ICU Medical’s financial advisors for the deal were Barclays and Wells Fargo Securities LLC, and Latham & Watkins acted as its legal advisor. Goldman, Sachs & Co. and Guggenheim Securities served as Pfizer’s financial advisors for the transaction, while Skadden, Arps, Slate, Meagher & Flom LLP and Ropes & Gray LLP served as its legal advisors. 
 
For the third quarter of 2016, ICU Medical expects to report quarterly revenue of approximately $96 million and adjusted EBITDA of approximately $33.5 million, and $1.20 adjusted earnings per share. For the year, ICU Medical expects to report results slightly above the high-end of its previously announced guidance of $370 million revenue, $131 million adjusted EBITDA, and $4.60 adjusted diluted earnings per share.
 
ICU Medical develops, manufactures and sells medical devices used in vascular therapy, oncology and critical care applications. ICU Medical’s products help prevent bloodstream infections and protect healthcare workers from exposure to infectious diseases or hazardous drugs. The company’s complete product line includes custom IV systems, closed delivery systems for hazardous drugs, needlefree IV connectors, catheters and cardiac monitoring systems. ICU Medical is headquartered in San Clemente, Calif.
 
Pfizer’s global portfolio includes medicines and vaccines as well as many consumer health care products. As one of the world’s largest biopharmaceutical companies, the company collaborates with healthcare providers, governments and local communities to support and expand access to reliable, affordable healthcare worldwide.