Baxter International has said that it will buy privately held Swedish dialysis product company Gambro for about $4 billion to complement its kidney therapy portfolio. Baxter will finance the deal, which it valued at 26.5 billion Swedish kroner, with debt and cash.
Baxter manufactures kidney dialysis equipment, drug infusion pumps and blood therapy products. The Gambro acquisition will complement Baxter’s renal business, which accounted for almost one-fifth of the company’s 2011 revenue of $13.89 billion.
Gambro is one of the largest makers of equipment for haemodialysis, which is usually performed in a hospital or clinic. The dialysis from Baxter’s machines is called peritoneal and can be performed at home.
The deal marks further consolidation in the kidney dialysis market, where Gambro and Baxter compete against rivals such as US-based DaVita HealthCare Partners and Germany’s Fresenius Medical Care.
Analyst Kristofer Liljeberg of Sweden’s Carnegie investment bank said the Gambro deal would give Baxter the second clinical dialysis position, behind Fresenius. “I think in the longer term, the ambition is to try to challenge Fresenius,” he added.
However, Mr Liljeberg said, Gambro, which is owned by Swedish investment holding company Investor and its partly owned private equity company EQT, had been struggling in recent years with slow growth and price competition.
Mr Liljeberg said the deal was good for family-owned Investor, which controls several of Sweden’s top companies. Since they bought Gambro, Investor and EQT have sold off its clinics and a blood-component business.
Excluding special items, Baxter expects the Gambro transaction to reduce earnings per diluted share by 10 cents to 15 cents in 2013 and be neutral or add modestly to them in 2014.
The deal is expected to close in the first half of next year. – (Reuters)
