By Echo Wang
NEW YORK (Reuters) -Buyout firm Carlyle Group (NASDAQ:CG) struck a deal to acquire Baxter’s kidney-care unit Vantive for $3.8 billion, the companies said on Tuesday.
The proceeds from the deal, which is expected to close by early 2025, will help medical-device maker Baxter (NYSE:BAX) reduce its debt pile. Baxter, which paid down about $2.8 billion of debt last year after divesting its biopharma unit, had long-term debt of $13.8 billion at the end of 2023.
In 2022, Baxter started exploring options for its kidney-care units after completing its $10.5-billion takeover of medical-equipment maker Hill-Rom (NYSE:HRC). It began the process of carving out Vantive early in 2023.
“Vantive is a strong, growing business with market-leading franchises, and 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,” said Robert Schmidt, Carlyle’s global co-head of healthcare.
Atmas Health, a healthcare investment platform that was formed by Carlyle in 2022, partnered with the firm on the deal for Vantive.
Baxter’s kidney-care operations generated about $4.5 billion in revenue last year and have more than 23,000 employees.
“This transaction is the right step at the right time for Baxter, capping off a robust process we started in early 2023,” said Baxter CEO Joe Almeida.
The Wall Street Journal reported Carlyle's talks to acquire the Vantive unit in July.
Private-equity dealmaking has rebounded this year as buyout firms have deployed more capital, after a spike in financing costs last year had triggered a slowdown. Global leveraged-buyout volumes jumped 41% to $286 billion during the first half of 2024, according to Dealogic.
Carlyle, which is one of the world's leading buyout firms with $435 billion of assets under management, has been an active acquirer and seller of assets this year.
In July, Carlyle teamed up with KKR to clinch a deal for a $10-billion student loan book from Discover Financial Services (NYSE:DFS).
Carlyle is exploring a sale of StandardAero that could value the U.S. aircraft maintenance services provider at about $10 billion, Reuters has reported.
Perella Weinberg Partners, JPMorgan and Sullivan & Cromwell advised Baxter on the deal. Barclays, Goldman Sachs and Kirkland & Ellis advised Carlyle.