Carlyle Group to Acquire Baxter’s Kidney-Care Unit Vantive for $3.8 Bn

Baxter began exploring options for its kidney-care business in 2022, shortly after its $10.5-billion acquisition of medical equipment maker Hill-Rom.

Global buyout firm Carlyle Group has reached a definitive agreement to acquire Baxter International's kidney-care unit, Vantive, for $3.8 billion. The deal, which was announced on Tuesday, is expected to close by early 2025.

The transaction is a strategic move for Baxter, a leading medical device maker, allowing the company to reduce its substantial debt burden. At the end of 2023, Baxter had long-term debt totaling $13.8 billion.

The proceeds from the Vantive sale will further aid Baxter in managing its financial liabilities, following its successful reduction of $2.8 billion in debt last year through the divestiture of its biopharma unit.

Baxter began exploring options for its kidney-care business in 2022, shortly after its $10.5-billion acquisition of medical equipment maker Hill-Rom.

The company initiated the process of carving out Vantive early in 2023, as part of its broader strategy to streamline operations and focus on its core businesses.

Reportedly, Vantive has proven to be a valuable and growing asset for Baxter, generating approximately $4.5 billion in revenue in 2023 and employing over 23,000 people globally.

Carlyle's Vision for Vantive

Carlyle Group, a leading private equity firm with $435 billion in assets under management, views Vantive as a strong business with market-leading franchises.

Robert Schmidt, Carlyle’s global co-head of healthcare, said, "Vantive is a strong, growing business with market-leading franchises, and we are delighted to partner with the Vantive team to pursue their strategic vision through the separation from Baxter and transformation into a standalone global business."

The deal also involves Atmas Health, a healthcare investment platform created by Carlyle in 2022, which partnered with the firm for this acquisition.

Revival of Private Equity Dealmaking

The acquisition of Vantive is part of a broader resurgence in private equity dealmaking, as firms such as Carlyle have begun deploying more capital in 2024.

This follows a slowdown in 2023 due to a spike in financing costs. According to Dealogic, global leveraged buyout volumes surged 41% to $286 billion in the first half of 2024.

Carlyle has been notably active in this space, with significant deals including a joint acquisition with KKR of a $10-billion student loan book from Discover Financial Services in July.

Additionally, Carlyle is reportedly exploring the sale of StandardAero, a US aircraft maintenance services provider, which could be valued at around $10 billion.

Baxter was advised by Perella Weinberg Partners, JPMorgan, and Sullivan & Cromwell on the Vantive deal. Carlyle’s advisors included Barclays, Goldman Sachs, and Kirkland & Ellis.