Carlyle to acquire Vantive for $3.8bn

November 2024 | DEALFRONT | PRIVATE EQUITY & VENTURE CAPITAL

Financier Worldwide Magazine

November 2024 Issue

In a move designed reduce its debt pile, US multinational healthcare company Baxter International is to divest its standalone kidney-care unit Vantive to global investment firm Carlyle in a transaction valued at $3.8bn.

Under the terms of the definitive agreement, which is subject to certain closing adjustments, the sale of Vantive will see Baxter receive approximately $3.5bn in cash, with net after-tax proceeds estimated to be approximately $3bn.

“Vantive is a strong, growing business with market-leading franchises,” said Robert Schmidt, global co-head of healthcare at Carlyle. “We are delighted to partner with the Vantive team to pursue their strategic vision through the separation from Baxter and transformation into a standalone global business.”

Vantive was first announced by Baxter in January 2023 as part of a broader strategic realignment to enhance future performance and create value for all stakeholders. However, in March 2024 the Baxter board of directors determined that selling Vantive to Carlyle would maximise value for Baxter stockholders and best position Baxter and Vantive for long-term success.

“Carlyle is uniquely positioned to support management in that pursuit with our global investing platform across the Americas, Europe, Middle East and Africa, and Asia,” continued Mr Schmidt. “Each of our regional teams will partner with Vantive to seek to ensure the success of Vantive, its employees, as well as its customers and their ultimate patients worldwide.”

A leading private equity investor in the MedTech sector, Carlyle has invested over $40bn in medical technology and diagnostic companies over the past decade. Moreover, Carlyle’s investment in Vantive is made in partnership with Atmas Health, a collaboration among three industry executives founded in September 2022 to focus on acquiring and building a market-leading healthcare business.

“I look forward to partnering with the combined Carlyle and Atmas team and working with my colleagues to advance Vantive’s mission of extending lives and expanding possibilities,” said Chris Toth, executive vice president and group president of Kidney Care at Baxter. “The transaction signals a new chapter in innovation on behalf of the patients and care teams around the world who rely on our solutions.”

A leader in global kidney care, offering products and services for peritoneal dialysis, hemodialysis and organ support therapies, including continuous renal replacement therapy, Vantive has more than 23,000 employees globally and had 2023 revenues of $4.5bn.

Upon the closing of the transaction, Mr Toth will serve as chief executive of Vantive and Kieran Gallahue, co-founder of Atmas, will serve as chairman of Vantive.

“The Atmas team is excited to support the growth of the Vantive business under the leadership of Mr Toth,” said Mr Gallahue. “We look forward to working together to build upon Vantive’s track record of patient-focused innovation and create long-term value in this next phase of the company’s development.”

Serving as financial advisers to Baxter are Perella Weinberg Partners LP and JP Morgan Securities LLC, with Sullivan & Cromwell LLP and Baker McKenzie serving as legal advisers. Barclays and Goldman Sachs & Co LLC are serving as financial advisers to Carlyle, with Kirkland & Ellis LLP serving as legal counsel.

The transaction is expected to close in late 2024 or early 2025, subject to receipt of customary regulatory approvals and satisfaction of other closing conditions.

Mr Toth concluded: “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.”

Fraser Tennant