Carlyle Plans $4 Billion Acquisition of Baxter Renal Care Unit Vantive: Report – Baxter Intl (NYSE:BAX)

The Carlyle Group CG is reportedly in exclusive takeover talks Baxter International Inc. BAX kidney care subsidiary Vantive in a deal valued at more than $4 billion, including debt.

The companies began exclusive negotiations in late June, the Wall Street Journal reported, citing sources familiar with the matter. A deal could be announced in the coming weeks, although there is a possibility that discussions could fall through or another bidder could emerge.

Baxter announced plans to spin off Vantive in the second half of this year, with the aim of separating its acute care business from its renal care business.

Baxter said Vantive would generate revenue of about $4.5 billion in 2023.

The company had planned for the spin-off to occur either through a sale to a private equity firm or through a spin-off into a public entity.

This strategic move is consistent with Baxter’s efforts to streamline its operations and focus on its core businesses.

The WSJ article added that acquiring Vantive would be a significant deal for Carlyle as it sees a gradual resurgence in private equity deals.

According to WSJ, citing Dealogic data, the value of leveraged buyouts in the private equity sector increased by 45% compared to the previous year, and the value of transactions amounted to $109.2 billion at the beginning of July.

The potential acquisition is part of Carlyle’s ongoing strategic shift, including the recent appointment of Steve Wise, former head of healthcare, as co-head of Americas Corporate Private Equity.

In light of changing market conditions, the potential acquisition of Vantive underscores Carlyle’s commitment to expanding its healthcare product offering and capitalizing on opportunities in the medical devices sector.

Industry observers and investors will be closely watching the outcomes of these exclusive negotiations.

Reduction: BAX shares closed at $34.91 on Friday.

Photo via Unsplash