Carlyle Snags Baxter's Kidney Care Unit In A Stunning $3.8 Billion Acquisition

Baxter initially intended to separate Vantive into an independent publicly traded entity. However, in March, the company shifted its strategy, revealing discussions with unidentified private equity firms regarding a possible sale. According to The Wall Street Journal, Baxter entered exclusive negotiations with Carlyle in late June. Baxter's management and board concluded that selling to Carlyle would enhance shareholder value and provide the company with greater flexibility in utilizing its capital to explore growth opportunities.

Baxter CEO José Almeida said in the statement, “Today’s announcement represents another critical step forward in the strategic transformation process we announced in early 2023. As a result of this proposed transaction, Baxter will emerge a more focused and more efficient company.”

“This definitive agreement brings a multi-decade renal-focused chapter in Baxter’s corporate history to an end, setting the stage positively for a more-streamlined and even more operationally-minded [company],” Stifel analysts stated in a Tuesday note to investors.

Vantive specializes in offering both acute and chronic dialysis treatments. In 2022 and 2023, the business recorded approximately $4.45 billion in sales, accounting for nearly one-third of Baxter's overall revenue. The company employs over 23,000 people. Last year, Baxter divested its biopharma solutions division to Warburg Pincus and Advent International for $4.25 billion as part of a broader restructuring effort, which involved consolidating its nine business segments into four.

Following the sale of Vantive, the Deerfield, Illinois-based company will operate with three remaining global business units: medical products and therapies, healthcare systems and technologies, and pharmaceuticals. Heather Knight leads the medical products and therapies unit, Reaz Rasul manages healthcare systems and technologies, and Alok Sonig directs the pharmaceuticals division. The sale of Vantive to Carlyle is anticipated to finalize in late 2024 or early 2025. On Tuesday, Baxter's stock price fell over 6%, trading at $34.65 during midday.