Baxter Sells BioPharma Solutions Biz for $4.25 Billion

Baxter has begun a deal to divest its BioPharma Solutions (BPS) business to private equity investor Advent International and growth investor Warburg Pincus, for about $4.25 billion in cash.
 
The transaction is expected to close in the second half of 2023. Net after-tax proceeds from the divestment are currently estimated at about $3.4 billion. In Q4 2023, Baxter expects the transaction will result in dilution of about $0.10 per share to the company’s earnings.
 
“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,” José (Joe) E. Almeida, chairman, president and CEO at Baxter told the press. “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 healthcare companies advance their mission and strategic priorities. I am confident that under their stewardship, BPS will continue to build on its leadership position, foster world-class talent, invest in new capabilities and capacity, and provide leading-edge, high-quality solutions for its clients.”
 
BPS provides sterile contract manufacturing solutions, parenteral delivery systems, and customized support services to the pharma and biotech industries. As a standalone company and partnering with the two buyers, BPS will become an independent, end-to-end CDMO with a range of services from clinical research to commercial deployment.
 
The proposed deal includes BPS manufacturing facilities and about 1,700 employees in Bloomington, Ind. and Halle, Germany. BPS is expected to accrue about $600 million in revenue for the full year 2023.
 
“BPS is a premier asset at the forefront of the biopharma industry, and one we’ve been closely following for a number of years,” said John Maldonado, a Managing Partner at Advent. “Leveraging our deep sector expertise and significant strategic resources, we believe this partnership can unlock multiple opportunities for growth and help the business realize its full potential by serving blue-chip customers, including Baxter, with high-value, specialized and end-to-end capabilities as a standalone company. We’re thrilled to partner with BPS to alleviate critical pain points for its customers and to help them provide life-changing therapies to patients around the world.” 
 
“BPS’s success and exceptional market reputation within the pharmaceutical sector position the company well to continue to grow its mission-critical services across a variety of therapeutic areas including oncology, metabolic disease, and infectious disease, among others,” said TJ Carella, Managing Director and Head of Healthcare at Warburg Pincus. “We are excited to partner with Advent and the impressive team at BPS who have developed differentiated technical capabilities and established an industry-leading reputation for quality and reliability in the supply chain for parenteral drugs.”
 
Last week, Baxter also named Chris Toth to be the CEO of the company’s planned spinoff of its Renal Care and Acute Therapies businesses.