BioPharma Solutions to go to Advent International and Warburg Pincus for $4.25 billion
Deerfield, Illinois; Boston, Massachusetts; and New York, N.Y. — Baxter International Inc. (NYSE:BAX), a leading global medical technology company, today announced that it has signed a binding agreement to sell its BioPharma Solutions (“BPS”) business to Advent International (“Advent”), one of the largest and most experienced global private equity investors, and Warburg Pincus, a leading global growth investor.
Baxter will receive $4.25 billion in cash under the agreement. Net proceeds after taxes are currently estimated at approximately $3.4 billion. The transaction is expected to close in the second half of 2023 and is subject to customary regulatory approvals and the satisfaction of other closing conditions. Baxter intends to use the after-tax proceeds to reduce debt, consistent with the company’s stated capital allocation objectives. For the full fourth quarter of 2023, Baxter expects the transaction to reduce net income by approximately $0.10 per share, with the total amount dependent on the timing of the transaction closing. It is assumed that this amount will be partially offset by lower interest payments as a result of the expected debt repayment.
“Today is an important step in Baxter’s ongoing transformation. It enables us to execute on our strategic priorities, strengthen our focus and create additional value for all of our stakeholders,” said José (Joe) E. Almeida, chairman, president and chief executive officer at Baxter. “BPS has long been recognized globally as a trusted and proven partner for services in the pharmaceutical and biotech industries. Advent International and Warburg Pincus have extensive experience working with innovative healthcare companies to help them achieve their goals and strategic priorities. I am confident that under their leadership, BPS will continue to build on its leadership position, nurture its world-class workforce, invest in new skills and capabilities, and deliver modern as well as high-quality solutions to its clients.”
BPS has been a leading provider of sterile manufacturing solutions, parenteral delivery systems and customized services to the pharmaceutical and biotech industries for decades. As a stand-alone company and in partnership with Advent and Warburg Pincus, BPS will act as a leading independent end-to-end CDMO, offering its clients a comprehensive portfolio of services from clinical research to commercial exploitation. BPS is well positioned to accelerate its go-to-market strategy and clinical development pipeline, increase manufacturing scale and drive further product innovation. The proposed transaction includes BPS’ manufacturing facilities and approximately 1,700 employees in Bloomington, Indiana, and Halle (Westphalia), Germany. BPS is expected to generate revenues of approximately $600 million in full-year 2023.
“BPS is a premier company at the forefront of the bio-pharma industry that we have been following closely for a number of years,” said John Maldonado, Managing Partner at Advent (Photo © Advent) . “We believe this partnership will provide numerous growth opportunities through our deep industry knowledge and extensive strategic resources. We will help the company realize its full potential and provide a high-quality, specialized and comprehensive range of services to well-known customers, including Baxter, as a stand-alone company. We are excited to partner with BPS and help its customers deliver life-changing therapies to patients around the world.”
“BPS’ success and excellent reputation in the pharmaceutical sector position the company well to further expand its particularly relevant services in a variety of therapeutic areas, including oncology, metabolic diseases and infectious diseases,” said TJ Carella, Managing Director and Head of Healthcare at Warburg Pincus. “We are pleased to be working with Advent and the outstanding team at BPS, which has impressive expertise and has built an industry-leading reputation for quality and reliability in the parenteral drug supply chain.”
“We strongly believe in the company’s mission to partner with pharmaceutical companies around the world to provide the scientific expertise, sterile solutions and personalized support needed to address today’s major healthcare challenges. We look forward to continuing the strong business that Baxter has built at BPS,” added Ruoxi Chen, Managing Director at Warburg Pincus. “This investment underscores our commitment to working with companies developing innovative life sciences products and services around the world.”
“BPS has been exceptionally successful in providing high-quality services and products that meet the unique needs of pharmaceutical and biotech clients worldwide,” said Carmine Petrone, managing director on Advent’s Healthcare team. “Together with our partners at Warburg Pincus, we have an extensive track record in carve-outs. We intend to leverage this experience in creating a scalable, diversified platform to capitalize on the significant market opportunity. We look forward to supporting BPS’ continued growth as the company does its part to benefit patients around the world and continues to help its customers achieve their commercialization goals.”
Advent has been investing in the healthcare sector for over 30 years. The private equity firm has made more than 50 investments in 17 countries worldwide across a range of sub-sectors, including pharmaceuticals, life sciences and medical devices. Advent’s recent investments in the healthcare sector include Iodine Software and RxBenefits. In global pharmaceutical services, Advent most recently invested in BioDuro, GS Capsule, ICE Group, Suven Pharmaceuticals/Cohance Lifesciences and Syneos Health.
Since its inception, Warburg Pincus has invested more than $16 billion in more than 180 healthcare companies, including Summit Health, Modernizing Medicine, Ensemble Healthcare Partners and Global Healthcare Exchange. Warburg Pincus is an active investor in the life sciences sector and has invested in Polyplus, Norstella, Sotera Health and Bausch + Lomb, among others.
Perella Weinberg Partners is acting as financial advisor and Sullivan & Cromwell is acting as legal counsel 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.
Every day, millions of patients, caregivers and healthcare providers rely on Baxter’s leading portfolio of diagnostic, critical care, renal, nutrition, hospital supplies and surgical products used in homes, hospitals, physicians’ offices and long-term care facilities. For more than 90 years, we have been at the critical intersection where medicines and systems that save and sustain lives meet healthcare providers who make them happen. With products, digital health solutions and therapies available in more than 100 countries, Baxter employees worldwide are building on an extensive legacy of medical innovation and driving the development of improved therapies. To learn more, visit www.baxter.com and follow us on Twitter, LinkedIn and Facebook.
About Advent International
Founded in 1984, Advent International is one of the largest and most experienced global private equity investors. The firm has invested in more than 405 private equity investments in 42 countries and had more than $92 billion in assets under management as of December 31, 2022. With 15 offices in 12 countries, Advent has built a globally integrated team of more than 290 private equity investment professionals in North America, Europe, Latin America and Asia. The company focuses on investments in five core sectors, including business and financial services, healthcare, industrial, retail, consumer goods and leisure, and technology.
After 35 years in the international investment business, Advent continues to take the approach of working with management teams to deliver sustainable revenue and earnings growth for its portfolio companies. www.adventinternational.com
About Warburg Pincus
Warburg Pincus LLC is a leading global growth investor. The company has more than $80 billion in assets under management. The company’s active portfolio comprises more than 250 companies and is highly diversified by growth phase, industry and region. Warburg Pincus is an experienced partner for management teams seeking to build long-lived businesses with sustainable value. Founded in 1966, Warburg Pincus has launched 21 private equity and 2 real estate funds that have invested more than $109 billion in over 1,000 companies in more than 40 countries. The company is headquartered in New York and has offices in Amsterdam, Beijing, Berlin, Hong Kong, Houston, London, Luxembourg, Mumbai, Mauritius, San Francisco, São Paulo, Shanghai and Singapore. www.warburgpincus.com