Baxter to sell BioPharma Solutions business for over $4B in cash

• Baxter International (NYSE:BAX) announced an agreement on Monday to divest its BioPharma Solutions (“BPS”) business to Warburg Pincus and private equity firm Advent International for $4.25B in cash.
• Accordingly, Advent and Warburg Pincus are set to acquire the contract manufacturing unit with its production sites and approximately 1,700 employees in the U.S. and Germany in a transaction expected to close in H2 2023.
• Baxter (BAX) projects the deal to generate $3.4B of net after-tax proceeds, which it expects to use for the purpose of cutting its debt load in line with its previously announced capital allocation priorities.
• The transaction is expected to dilute the company’s Q4 2023 earnings by approximately $0.10 per share, with the final amount depending on the time of its completion. However, the reduced interest expenditure linked to repaid debt will likely partially offset the earnings impact.
• On Sunday, Reuters first reported that BAX was nearing a deal to sell the BPS unit, which follows its previously announced plans to explore strategic alternatives for the business.

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