Planned Baxter Spinoff on the Chopping Block?

Baxter International’s plan to spin off its kidney care business, which it named Vantive last July, may be on the chopping block in favor of a sale to private equity investors. Writing in a US Securities and Exchange Commission (SEC) filing, the company disclosed it had been in recent discussions with private equity investors about the potential sale of the kidney segment, but that “no final decision on the separation structure has been made.”

“Consistent with Baxter’s commitment to evaluate strategic options in the interest of maximizing stockholder value, Baxter disclosed that it has been in recent discussions with select private equity investors to explore a potential sale of the Kidney Care asset in lieu of the proposed spinoff of that business,” according to the SEC filing.

First announcing spinoff plans in January 2023, Baxter said the changes were intended to simplify the company’s structure and narrow its focus to hospital solutions and connected care. As a new publicly traded company, Vantive will include its renal care and acute therapies businesses.

The renal care division has a 70-year history and international portfolio of dialysis machines, supplies, and services, as well as organ-support hardware. The catalog brought in about $4.4 billion in sales in 2023 and reached 1 million patients in 70 countries.

Baxter said that regardless of whether it ends up as a spinoff or sale, it plans to separate its kidney care segment in the second half of 2024. When the separation is complete, Chris Toth, Baxter EVP and group president of kidney care will reportedly serve as Vantive CEO. Additionally, Matt Harbeugh, former chief final officer of NuVasive, has been named future CFO.

Baxter isn’t a stranger to private equity sales.

As part of the company’s plan to narrow its focus, Baxter also penned the $4.25 billion sale of Baxter’s biopharma solutions business, which was sold to private equity firms Warburg Pincus and Advent International, in a deal that closed in October 2023.