The Carlyle Group is finally closing in on its major medtech acquisition, following months of reports that it has been wooing companies looking to divest their divisions.
The private equity firm has signed a pact with Baxter to obtain its Vantive kidney care group, with a deal valued at $3.8 billion. Baxter estimated it will net about $3 billion in cash, after taxes, for the company and its about 23,000 employees that were once slated to become an independent venture before the end of this year.
Baxter first announced its intention to spin out its decades-old dialysis, organ support and acute renal therapy portfolios in January 2023—which, together, brought in more than $4.45 billion in 2023 revenue, and reached over 1 million patients in 70 countries.
At the time, President and CEO José Almeida described the move as a major inflection point for Baxter. Last year the company also agreed to sell off its biopharma solutions business, now known as Simtra, through a $4.25 billion deal with Warbug Pincus and Advent International.
The proceeds of both will help pay down the debts Baxter incurred in 2021 via its $12.2 billion purchase of Hill-Rom. Meanwhile, in the intervening time, the company also moved to reduce its headcount by 5% last year, as part of a larger cutback plan to save more than $300 million.
“As a result of this proposed transaction, Baxter will emerge a more focused and more efficient company, better positioned to redefine healthcare delivery and advance innovation that benefits patients, customers and shareholders,” Almeida said in a statement alongside the Carlyle deal announcement.
“I am confident that, under Carlyle’s stewardship and Chris Toth’s leadership, the Vantive team will continue to build on the business’s 70-year legacy as a pioneer in kidney disease and vital organ therapies,” he added.
Baxter first disclosed earlier this year in an SEC filing that it was in talks with private equity firms interested in acquiring Vantive. Then, the Carlyle Group was reported as a potential finalist this summer—however, reports from Reuters and The Wall Street Journal had pegged the deal’s value as north of $4 billion, when including debt.
The Carlyle Group was also once considered a front-runner for Medtronic’s planned heave-ho of its patient monitoring and respiratory divisions, with a price tag that could have passed $7 billion. Ultimately, the medtech giant reversed course, deciding instead to merge the divisions into a single acute care and monitoring unit while exiting the hospital ventilator market entirely.
“Vantive is a strong, growing business with market-leading franchises, and we are delighted to partner with the Vantive team to pursue their strategic vision through the separation from Baxter and transformation into a standalone global business,” said Robert Schmidt, global co-head of healthcare at Carlyle, which is working on the deal in concert with the Atmas Health investment group that it helped establish in 2022.
“Carlyle is uniquely positioned to support management in that pursuit with our global investing platform across the Americas, EMEA and Asia, where each of our regional teams will partner with Vantive to seek to ensure the success of the business, its employees, as well as its customers and their ultimate patients worldwide,” Schmidt said. Carlyle also maintains investments in Medline and QuidelOrtho, among others.
Atmas’ co-founder, Kieran Gallahue, will serve as Vantive’s chairman after the deal’s closure, which is expected by the end of this year or early next. As previously announced, Toth, Baxter’s group president of kidney care, is set to take the helm as CEO.