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Baxter to divest from biopharma solutions business for $4.25 billion

por John R. Fischer, Senior Reporter | May 10, 2023
Business Affairs
Baxter International will divest its bioPharma Solutions business to Advent and Warburg Pincus for $4.25 billion. (Photo courtesy of Baxter International)
Baxter International is divesting its BioPharma Solutions (BPS) business to private equity firm Advent International and global growth investor Warburg Pincus for $4.25 billion that it will use to reduce its debt, one of its capital allocation priorities.

The company, whose BPS unit specializes in sterile contract manufacturing solutions, parenteral delivery systems, and customized support services for the pharma and biotech industries, and is on track to generate approximately $600 million in revenue for the full year 2023, expects the deal to close in the second half of the year, affecting approximately 1,700 employees in Bloomington, Indiana, and Halle, Germany, as well as BPS manufacturing facilities.

BPS will then become a stand-alone company, operating in partnership with Advent and Warburg Pincus as a premier, independent, end-to-end contract development and manufacturing organization, which manages not only outsourced pharmaceutical manufacturing but also innovation and development prior to manufacturing, sparing pharmaceutical companies from paying for additional investment.

“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 stand-alone company,” said John Maldonado, a managing partner at Advent, in a statement.

Baxter estimates that net after-tax proceeds will be approximately $3.4 billion, and that the transaction will dilute approximately $0.10 per share of the company’s earnings, with the total amount depending on the time at which the deal closes and partially offset by reduced interest expense payments following anticipated debt repayment.

Advent, which was started over 30 years ago, has invested in over 50 pharmaceutical, life sciences and medical device companies and endeavors in 17 countries, with notable and recent ones including Iodine Software, RxBenefits, BioDuro, GS Capsule, ICE Group, Suven Pharmaceuticals/Cohance Lifesciences, and Syneos Health.

Warburg Pincus has invested over $16 billion in over 180 healthcare companies, including Summit Health, Modernizing Medicine, Ensemble Healthcare Partners, and Global Healthcare Exchange.

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