Baxter International Inc., a global medtech company, signed a definitive agreement to divest its BioPharma Solutions (BPS) business to Advent International, a global private equity investor, and Warburg Pincus, a global growth investor.

Under the agreement, Baxter will receive $4.25 billion in cash, subject to certain closing adjustments, with net after-tax proceeds currently estimated to be approximately $3.4 billion. The transaction is expected to close in the second half of 2023.

Baxter intends to use the proceeds to reduce its debt, consistent with the company’s stated capital allocation priorities. 

BPS has been a provider of sterile contract manufacturing solutions, parenteral delivery systems and customized support services to the pharma and biotech industries for decades. As a standalone company and in partnership with Advent and Warburg Pincus, BPS aims to operate as a premier, independent end-to-end CDMO providing a range of services from clinical research to commercial deployment. BPS should be well-positioned to accelerate its go-to-market strategy and clinical development pipeline, execute on throughput expansion and drive further product innovation.

The proposed transaction includes BPS manufacturing facilities and approximately 1,700 employees in Bloomington, IN and Halle, Germany. BPS is expected to generate revenues of approximately $600 million on a reported basis for full year 2023.

“Today represents an important step in Baxter’s ongoing transformation journey as we continue to execute against our strategic priorities, enhance our focus and create additional value for all our stakeholders,” said José Almeida, Chairman, President, and CEO Baxter. “BPS has long been recognized worldwide as a trusted and preferred partner of contract manufacturing services for the pharmaceutical and biotech industries. Advent International and Warburg Pincus have extensive experience helping innovative healthcare companies advance their mission and strategic priorities. I am confident that under their stewardship, BPS will continue to build on its leadership position, foster world-class talent, invest in new capabilities and capacity, and provide leading-edge, high-quality solutions for its clients.”

“BPS is a premier asset at the forefront of the biopharma industry, and one we’ve been closely following for a number of years,” said John Maldonado, a managing partner at Advent. “Leveraging our deep sector expertise and significant strategic resources, we believe this partnership can unlock multiple opportunities for growth and help the business realize its full potential by serving blue-chip customers, including Baxter, with high-value, specialized and end-to-end capabilities as a standalone company. We’re thrilled to partner with BPS to alleviate critical pain points for its customers and to help them provide life-changing therapies to patients around the world.”

TJ Carella, managing director and head of healthcare at Warburg Pincus said, “BPS’s success and exceptional market reputation within the pharmaceutical sector position the company well to continue to grow its mission-critical services across a variety of therapeutic areas including oncology, metabolic disease, and infectious disease, among others. We are excited to partner with Advent and the impressive team at BPS who have developed differentiated technical capabilities and established an industry-leading reputation for quality and reliability in the supply chain for parenteral drugs.”