Baxter International (Deerfield, Illinois) yesterday reported that it has entered an agreement to sell its Transfusion Therapies business to Texas Pacific Group (San Francisco/London) for $540 million.
Texas Pacific and Maverick Capital will acquire the assets of the Transfusion Therapies business, including its global product portfolio of manual and automated blood- collection products and storage equipment, as well as five manufacturing facilities located in Haina, Dominican Republic; La Chatre, France; Maricao and San German, Puerto Rico; and Nabeul, Tunisia.
“This decision is one that comes after months of strategic and financial reviews of our business portfolio,” said Robert Parkinson Jr., president/CEO and chairman of Baxter. “While the Transfusion Therapies business is a global leader in the blood-collection and processing industry, this divestiture allows us to increase our focus and investment on businesses with more long-term strategic value for Baxter’s shareholders.”
Deborah Spak, spokesperson for Baxter, told Medical Device Daily that much of the proceeds from the sale will go to research.
“We have been pretty open about our desire to increase our investment in R&D and in business development and in fact already have planned a record level for investment of R&D for 2006, and so, obviously, the proceeds will help us continue that acceleration.”
She noted that the company’s R&D spending in 2005 was $533 million and that the company “expects to grow that investment in the low to mid-teens” in 2006.
R&D spending for 2005 full year was $533 million and we have said that for 2006 we expect to grow that investment in the low to mid-teens [of the $533 million].” She emphasized that as “a record” for Baxter.
In terms of business development, she said the money will also support “other primary business in biosciences, medication delivery and renal.” While she said there were no specific areas targeted for the funding, as yet, she noted that the company is doing “neat things in the area of biosurgery, and also has some interesting work under way in the use of adult stem cells in cardiovascular disease.
Under transition agreements negotiated by the companies, Baxter will provide manufacturing and a variety of support services to the business. The value of these services has not yet been determined, Spak said.
Subject to regulatory approvals and other customary closing conditions, the companies expect to close the transaction by 1Q07.
“We will be working closely with the Transfusion Therapies leadership team and Texas Pacific Group in the coming months to ensure a smooth transition,” Parkinson said.
Transfusion Therapies products are used by hospitals, blood banks and plasma-collection centers worldwide to collect and process blood and blood components for therapeutic use. The business has about 3,500 employees and sales of more than $500 million.
Texas Pacific is a global private equity investment firm founded in 1992. The firm manages about $30 billion in assets across healthcare, retail/consumer, airlines, media and communications, industrials, technology and financial services.
Maverick Capital, a manager of private investment funds, is also an investor in the transaction.
In other dealmaking activity:
• Beckman Coulter (Fullerton, California) reported that it has signed an agreement to acquire Lumigen (Southfield, Michigan) for $185 million in cash.
Lumigen develops detection chemistries for high-sensitivity testing in clinical diagnostics and life science research.
“Lumigen’s proprietary chemiluminescent chemistry is the detection method used in our Access family of immunoassay systems,” said Richard Creager, PhD, vice president of R&D for Beckman Coulter’s immunoassay business. “Now, with Lumigen as part of the Beckman Coulter family, we are assured access to all of their current and future technology for immunochemical and other high-sensitivity testing.”
About 40% of Lumigen’s 2005 revenues of $33 million were from sales of chemiluminescent substrate to Beckman Coulter for use in its immunoassay analyzers. Going forward, the related-party revenues will be eliminated in the consolidation. Lumigen also manufactures and licenses chemicals used by other clinical diagnostics and life-sciences manufacturers.
The transaction is expected to close by Nov. 1.
Beckman Coulter manufactures biomedical testing instrument systems, reagents and supplies that are designed to simplify and automate laboratory processes.
• Healthways (Nashville, Tennessee), a provider of health and care support services, and LifeMasters Supported SelfCare (South San Francisco, California), a disease management company, reported that the previously disclosed merger agreement between the two companies disclosed in May has been terminated.
“No further discussions are planned,” it said.
Healthways said that the termination follows “a data and reporting error” made by a third-party actuarial firm with regard to a LifeMasters contract that had recently been reported to the company.
The error was unknown to LifeMasters at the time the parties entered into the merger agreement. The correction of the data and reporting error made by the third party “materially impacted prior period revenues and the financial projections which were relied upon by Healthways in entering into the merger, and as a result, a material adverse effect occurred and prevented LifeMasters from satisfying its conditions for closing the merger Despite the best efforts of both companies, an agreement on a revised valuation for the merger could not be reached, they said.
• Home healthcare nursing company Amedisys. (Baton Rouge, Louisiana) reported the acquisition of home health agency Jefferson County Patient Care Services (Hillsboro, Missouri).
The acquisition is effective as of Oct. 1 and is expected to contribute about $3.5 million in annualized revenue.
The acquisition represents Amedisys’ initial entry into Missouri, it said. The acquisition includes two locations, Hillsboro, and St. Louis.
“We are very happy to enter the Missouri market through this acquisition,” said William The agency is not expected to add materially to earnings in 2006. Terms of the purchase agreement were not disclosed.