logo
  Join        Login             Stock Quote

Baxter International (BAX) To Buy Gambro AB For $4B From Investor AB, EQT IV

 December 04, 2012 08:29 AM
 


(By Balaseshan) Baxter International Inc. (NYSE: BAX) said it has agreed to buy privately-held Lund, Sweden-based dialysis product company Gambro AB for 26.5 billion Swedish krona or about $4 billion from Investor AB and EQT IV.

Baxter expects this transaction to be dilutive to adjusted earnings per share (EPS) by $0.10 to $0.15 in 2013 and neutral to modestly accretive to adjusted EPS in 2014. Excluding the impact of special items and estimated amortization of intangible assets, the company expects this transaction to be neutral to adjusted EPS in 2013, and accretive in 2014 by $0.20 to $0.25.

The company expects this transaction to be increasingly accretive to adjusted earnings per diluted share beyond 2014 and, in addition to an array of commercial synergies, projects opportunities for annual cost synergies totaling about $300 million by 2017.

[Related -Pfizer Inc. (PFE), Baxter International (BAX): Two Healthcare Stocks Primed To Outperform]

Baxter now expects over its five-year long-range financial plan to increase sales (excluding the impact of foreign currency) by 7% to 8% and to grow adjusted EPS in the 8% to 10% range, both on a compounded annual basis.

The transaction will be financed through a combination of cash generated from overseas operations and debt. Baxter expects to maintain its current dividend payout ratio of about 40%.

The acquisition gives Baxter a comprehensive dialysis product portfolio, complements Baxter's global home dialysis offerings, and positions the company to better meet the evolving needs of the large and growing dialysis market.

[Related -7 Dividend Stocks Sending More Cash To Shareholders]

The value of Gambro's equity is 18.3 billion Swedish krona after deducting net debt of 8.2 billion Swedish krona (net debt as of signing).

In 2006, EQT and Investor, through Indap AB, took Gambro private through a joint public offer. In conjunction with Indap's public offer, Investor contributed its 20% ownership in Gambro for a 49% ownership in Indap while releasing cash of 3.6 billion Swedish krona.

Total proceeds to Investor will be about 10.5 billion Swedish krona. The proceeds will be used for investments in existing Core Investments, to delever subsidiaries and return Investor's leverage to the target range of 5% to 10%.

The closing of the transaction is expected to occur in the first half of 2013.

BAX closed Monday's regular session down 0.71% at $65.80. The stock has been trading between $47.55 and $68.91 for the past 52 weeks.

iOnTheMarket Premium
Advertisement

Advertisement


Post Comment -- Login is required to post message
Name:  
Alert for new comments:
Your email:
Your Website:
Title:
Comments:
 

rss feed

Latest Stories

article imageChart Says This Retailer's Comeback Isn't Finished

One of the surprises, at least on the surface, of the market's recent swoon was the outperformance of read on...

article imageETF Performance Review: Major Asset Classes | 19 Dec 2014

It’s all about real estate investment trusts (REITs) these days when it comes to bullish performance among read on...

article imageOil and Global Stock Markets Rebounding Sharply

So far so good on our expectation of a 4 to 5% pullback and then a resumption of the bull read on...

article imageGrading the FOMC

Love its members or loathe them, you have to admire the gradual impact the policy-making committee has had read on...

Advertisement
Popular Articles

Advertisement
Daily Sector Scan
Partner Center



Fundamental data is provided by Zacks Investment Research, and Commentary, news and Press Releases provided by YellowBrix and Quotemedia.
All information provided "as is" for informational purposes only, not intended for trading purposes or advice. iStockAnalyst.com is not an investment adviser and does not provide, endorse or review any information or data contained herein.
The blog articles are opinions by respective blogger. By using this site you are agreeing to terms and conditions posted on respective bloggers' website.
The postings/comments on the site may or may not be from reliable sources. Neither iStockAnalyst nor any of its independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. You are solely responsible for the investment decisions made by you and the consequences resulting therefrom. By accessing the iStockAnalyst.com site, you agree not to redistribute the information found therein.
The sector scan is based on 15-30 minutes delayed data. The Pattern scan is based on EOD data.