Baxter International (NYSE:BAX) dropped ~2% pre-market Friday after announcing a restructuring initiative to spin off the company’s Renal Care and Acute Therapies global business units into a separate, publicly traded company.
The units which generated ~$5B in sales globally in 2021 will cater to market segments worth ~$15B, which are projected to grow at 3% - 4% compound annual growth rate over the next three years, Baxter (BAX) said.
The company intends to complete the proposed spinoff in 12 to 18 months, subject to certain closing conditions, including the final approval from its Board of Directors.
Baxter (BAX) is also seeking strategic alternatives for the BioPharma Solutions business, which provides contract manufacturing services to the healthcare industry.
The options under consideration, including a potential sale, “would help Baxter further streamline its focus while providing an opportunity for capital redeployment in accordance with its stated capital allocation priorities, including debt repayment,” the company said.
Concurrently, Baxter (BAX) announced the start of a restructuring plan to optimize its production footprint.
Seeking Alpha contributor Wolf Report explains why Baxter (BAX) is one of the number-one picks in healthcare/Medtech for 2023.