Baxter Sells Kidney Care Unit to Carlyle for $3.8 Billion

Baxter International Inc. has announced a definitive agreement to sell its Kidney Care segment, which will be rebranded as Vantive, to Carlyle Group for $3.8 billion. This strategic move, revealed on August 13, 2024, follows Baxter's earlier plans to establish a standalone kidney care company as part of its broader realignment strategy initiated in January 2023. The decision to sell rather than spin off the unit was made after a thorough review by Baxter's management and board, who concluded that this route would provide the best value for shareholders and ensure long-term success for both Baxter and the new entity, Vantive. Analysts had previously estimated Vantive's fair value at $8.00 per share, translating to an equity value of approximately $4 billion, based on a projected EV/EBITDA multiple of 10.0x for 2024. Baxter's overall performance remains robust, with reported net sales of $14.8 billion for the fiscal year 2023. However, following the cancellation of the planned spin-off transaction, coverage on Baxter's stock has been dropped by analysts, reflecting a shift in focus for the company as it navigates this significant transition. This acquisition by Carlyle marks a pivotal moment for both firms, as they aim to leverage the strengths of the Kidney Care segment in a competitive healthcare market.