US medtech giant Baxter has announced today (13 August) the signing of a definitive agreement divesting itself of the kidney care segment, handing the business over to global investment company Carlyle in a $3.5bn deal.
The agreement comes following a March 2024 announcement in which the company detailed that it was looking to either spin out or sell off its kidney care wing, set to be renamed Vantive, in hopes of improving its overall performance as well as paying off debts.
Now, the company says that its board determined that selling the business to Carlyle should maximise value for Baxter stockholders and best position Baxter and Vantive for long-term success.
The new spin-out will take products and services for peritoneal dialysis, haemodialysis and organ support therapies, including continuous renal replacement therapy (CRRT) from Baxter’s portfolio. At the same time, the spin-out company comprises more than 23,000 employees and had 2023 revenues of $4.5bn.
Baxter CEO José Almeida said: “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, better positioned to redefine healthcare delivery and advance innovation that benefits patients, customers and shareholders.”
The news comes amid a difficult quarter for Baxter. In June the US Department of Health and Human Services identified serious security issues in two medical device products from Baxter, namely the Baxter Welch Allyn Configuration Tool, and the Baxter Welch Allyn Connex Spot Monitor. Following that, one of Baxter’s ventilator devices, its Life2000 series, was hit by a US Food and Drug Administration (FDA) recall after it was found that they were failing to charge due to damage to the battery charger dongle.
Following the completion of the divestment Baxter is targeting operational sales growth of 4% to 5% annually with plans to repay outstanding debts.
Chris Toth, group president of the former kidney care arm of Baxter, who will serve as Vantive’s CEO, said: “Today’s announcement signals a new chapter in innovation on behalf of the patients and care teams around the world who rely on our solutions. Through this transaction, Vantive will be well-positioned to deepen our commitment to elevating dialysis through digital solutions and advanced services, while looking beyond kidney care to invest in transforming vital organ therapies.”
