For quite literally decades… there had been intermittent talk, of trying to monetize the parenterals assets at what was then legacy Baxter Travenol / American Hospital Supply. At least three successive CEOs considered doing a spin, or an outright sale. But none could ever find a buyer for cash willing to pay full boat, or so it was said.

However, here under Mr. Almeida, Baxter has been able to get Warburg (advised by Fast Fred Hassan, from time to time, in health care arenas) to step up. . . and pay “full boat” — and in cash, to boot. This will allow the Deerfield company to greatly reduce debt levels, and free Mr. Almeida up, to make likely additional transformative moves, as he escapes the various mistakes made by Bob Parkinson, the last CEO (who was supposed to only stay for four or five years, but lingered. . . for nearly triple that). [Mr. Davis was Mr. Parkinson’s CFO, back then — but is now running things, at Rahway, NJ, as CEO.]

Here’s the latest — and it is all good news for Baxter investors (since Baxter sits at about a half of what it was just one year ago, where most of the rest of life sciences is up around 30 per cent, year over year):

…Under the terms of the definitive 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, subject to receipt of customary regulatory approvals and satisfaction of other customary closing conditions. Baxter intends to utilize the after-tax proceeds to reduce its debt, consistent with the company’s stated capital allocation priorities. For the full fourth quarter 2023, Baxter estimates the transaction to result in dilution of approximately $0.10 per share to the company’s earnings, the total amount depending on the time of close. This amount is expected to be partially offset through reduced interest expense payments following anticipated debt repayment….

As a standalone company and in partnership with Advent and Warburg Pincus, BPS will operate as a premier, independent end-to-end CDMO providing a range of services for clients, 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, Indiana and Halle, Germany. BPS is expected to generate revenues of approximately $600 million on a reported basis for full year 2023….

Now you know — and that’s about seven times annual sales, and truly a “fully-loaded boat” price. Yup — that’s some old school power alley trivia, right there! Hah! Onward!

नमस्ते