Baxter International Inc. has announced the sale of its kidney care segment to Carlyle for $3.8 billion. The company expects to receive approximately $3.5 billion in cash with net after-tax proceeds estimated to be around $3 billion. Baxter intends to use the proceeds to reduce its debt in line with its capital allocation priorities.
Vantive, the kidney care segment, is a leader in global kidney care with 23,000 employees globally and had 2023 revenues of $4.5 billion. After the sale, Baxter is targeting constant currency operational sales growth of 4% to 5% annually, driven by innovation and continued market expansion. The company also anticipates an adjusted operating margin of approximately 16.5% in 2025.
Carlyle's investment in Vantive is made in partnership with Atmas Health, a collaboration among three industry executives founded in September 2022 to focus on acquiring and building a market-leading healthcare business. The transaction is expected to close in late 2024 or early 2025, subject to regulatory approvals and other closing conditions.
Baxter plans to provide additional details regarding the company’s longer-term strategic and financial outlook at an investor conference in 2025. Additionally, the company expects to post financial schedules reflecting the kidney care segment as a discontinued operation for certain historical periods prior to the release of its third-quarter 2024 earnings results.
Following these announcements, the company's shares moved -0.6%, and are now trading at a price of $36.93. For the full picture, make sure to review Baxter International's 8-K report.
