Baxter to acquire Gambro AB
Acquisition to total approximately $4 billion
DEERFIELD, Ill.—Baxter International Inc. has announced thesigning of a definitive agreement for the acquisition of privately held GambroAB, a dialysis product company out of Lund, Sweden, for a total of 26.5 billionSEK (approximately $4 billion).
"Both companies have a longstanding heritage in kidneycare with innovative technologies and a dedication to saving, sustaining andimproving the lives of patients worldwide," Guido Oelkers, president andCEO of Gambro, said in a press release. "This acquisition responds to theneeds of the nephrology community, healthcare providers and patients seeking acomprehensive dialysis offering of proven products and therapies."
Gambro is a medical technology company dedicated todeveloping, manufacturing and supplying products, therapies and technologiesfor kidney and liver dialysis, myeloma kidney therapy, hemodialysis, continuousrenal replacement therapy and other extracorporeal therapies for chronic andacute patients. The company boasts a chronic care portfolio of HD devices,including advanced monitors, dialyzers, bloodlines, cyclers and dialysissolutions. The company saw annual sales of approximately $1.6 billion in 2011,with 7,500 employees and 13 production facilities in nine countries.
Gambro's dialysis product portfolio complements Baxter's andprovides the company with long-term growth opportunities, which will allow itto accelerate its product sales in markets where Gambro has a large footprint,such as Europe. Using its own presence in Latin America and Asia-Pacific, whereBaxter has continued to develop its peritoneal dialysis business, Baxter canexpand on Gambro's reach.
Current estimates are that more than two million patientsare on some form of dialysis globally, and dialysis treatment rates areexpected to continue increasing by more than 5 percent each year, due largelyto increasing incidence rates for diabetes and hypertension.
"Baxter has a legacy of innovation in dialysis,including the development of peritoneal dialysis for the treatment of end-stagekidney disease patients in the home. This acquisition further strengthens ourglobal dialysis offerings by extending our portfolio in the hemodialysissegment," said Robert L. Parkinson, Jr., chairman and CEO of Baxter, in astatement. "This transaction will provide attractive returns and enhanceBaxter's sales and earnings growth over the company's current long-rangefinancial plan."
Baxter expects the transaction to be dilutive to adjustedearnings per diluted share in 2013, by 10 cents to 15 cents, and neutral tomodestly accretive to adjusted earnings per diluted share in 2014. From 2014on, the transaction is expected to be increasingly accretive, with projectedannual cost synergies expected to total roughly $300 million by 2017. No detailswere released as to Baxter's plans for Gambro's employees or facilities. Thetransaction is subject to customary closing conditions, including regulatoryapprovals, and is expected to close in the first half of next year.
Baxter brought on J.P. Morgan as its financial advisor forthe transaction, with Kirkland & Ellis LLP acting as its legal advisor.
SOURCE: Baxter press release