Baxter International Inc. (BAX) on Tuesday agreed to acquire the
continuous renal-replacement therapy business of Edwards
Lifesciences Corp. (EW) for as much as $65 million in a move to
extend its renal-care business.
Under the agreement, expected to close in the third quarter,
Baxter will initially pay $56 million and provide up to an
additional $9 million if certain revenue targets are reached over
the next two years.
For patients with life-threatening kidney injuries, continuous
renal replacement therapy - or CRRT - provides continuous removal
of excess fluid and waste that builds up with acutely impaired
kidney function. It is usually administered at a hospital.
The move gives Baxter a line with which it is very familiar.
Baxter supplies solutions used in CRRT treatment and is the
exclusive distributor of Edwards' product in China, Latin America
and the U.S. Europe and Australia will be among the markets Baxter
will enter as part of the acquisition.
The product line is part of Edwards' Critical Care business and
represented approximately $50 million in sales in 2008, primarily
in Europe. The sale allows the company to "better focus on its
global strategic priorities," said Critical Care executive Carlyn
D. Solomon. "Baxter has been our long-term supplier and partner for
this business and we believe this product line will thrive under
Baxter's ownership."
Baxter has benefited from a broad product lineup that helps
offset spending cutbacks by hospitals and patients - though it has
been plagued by problems with its Colleague infusion pumps. In its
most recent quarter, sales in the renal business fell 8% to $515
million but rose 1% excluding foreign-exchange impacts.
Shares of Baxter and Edwards were inactive premarket; they
closed Monday at $50.47 and $65.65, respectively.
-By Mike Barris, Dow Jones Newswires; 201-938-5658;
mike.barris@dowjones.com