Baxter to divest biopharma solutions business to Advent International and Warburg Pincus for $4.25 bn

Baxter International has signed a definitive agreement to divest its BioPharma Solutions (BPS) business to Advent International (Advent) and Warburg Pincus.

Under the terms of the definitive agreement, Baxter will receive $4.25 billion in cash, subject to certain closing adjustments, with net after-tax proceeds currently estimated to be approximately $3.4 billion. The transaction is expected to close in the second half of 2023, subject to receipt of customary regulatory approvals and satisfaction of other customary closing conditions. Baxter intends to utilise the after-tax proceeds to reduce its debt, consistent with the company’s stated capital allocation priorities. For the full fourth quarter 2023, Baxter estimates the transaction to result in dilution of approximately $0.10 per share to the company’s earnings, the total amount depending on the time of close. This amount is expected to be partially offset through reduced interest expense payments following anticipated debt repayment.

BPS has been a leading provider of sterile contract manufacturing solutions, parenteral delivery systems and customised support services to the pharma and biotech industries for decades. As a standalone company and in partnership with Advent and Warburg Pincus, BPS will operate as a premier, independent end-to-end CDMO providing a range of services for clients, from clinical research to commercial deployment. The proposed transaction includes BPS manufacturing facilities and approximately 1,700 employees in Bloomington, Indiana and Halle, Germany. BPS is expected to generate revenues of approximately $600 million on a reported basis for full year 2023.

Perella Weinberg Partners is serving as financial advisor and Sullivan & Cromwell is serving as legal advisor to Baxter. Moelis & Company LLC and Truist Securities are serving as financial advisors and Cleary Gottlieb Steen & Hamilton and Ropes & Gray are serving as legal advisors to Advent and Warburg Pincus.