Baxter Enhances Renal Therapies Portfolio with Acquisition of Gambro

  Baxter Enhances Renal Therapies Portfolio with Acquisition of Gambro

  Acquisition Expands Baxter’s Role as Global Provider of Dialysis Products

   Transaction Supports Accelerated Sales and Earnings Growth Over Baxter’s
                          Long-Range Financial Plan

Business Wire

DEERFIELD, Ill. -- December 04, 2012

Baxter International Inc. (NYSE:BAX) has entered into a definitive agreement
to acquire Gambro AB, a privately held dialysis product company based in Lund,
Sweden, for total consideration of 26.5 billion SEK (approximately $4.0
billion USD at current exchange rates). Gambro is a global medical technology
company focused on developing, manufacturing and supplying dialysis products
and therapies for patients with acute or chronic kidney disease. 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.

''Baxter has a legacy of innovation in dialysis, including the development of
peritoneal dialysis for the treatment of end-stage kidney disease patients in
the home. This acquisition further strengthens our global dialysis offerings
by extending our portfolio in the hemodialysis segment,'' said Robert L.
Parkinson, Jr., chairman and chief executive officer of Baxter. ''This
transaction will provide attractive returns and enhance Baxter’s sales and
earnings growth over the company’s current long-range financial plan.''

Gambro is a global provider of dialysis products and technologies used in
hemodialysis (HD) and continuous renal replacement therapy (CRRT), with annual
sales of approximately $1.6 billion in 2011. Its portfolio in the traditional
chronic care segment consists of HD devices including advanced monitors,
dialyzers, bloodlines, cyclers and dialysis solutions. Gambro’s in-center HD
devices include the Artis™ system and the AK 96™ system. In the acute care
segment, which includes CRRT and treatment for fluid overload, among others,
Gambro offers the Prismaflex^® system used for the treatment of critically ill
patients with acute kidney injury.

''Both companies have a longstanding heritage in kidney care with innovative
technologies and a dedication to saving, sustaining and improving the lives of
patients worldwide,'' said Guido Oelkers, president and chief executive
officer of Gambro. ''This acquisition responds to the needs of the nephrology
community, healthcare providers and patients seeking a comprehensive dialysis
offering of proven products and therapies.''

More than two million patients globally are on some form of dialysis, with
dialysis treatment rates increasing more than 5 percent annually in part due
to the rising rates of diabetes and hypertension. Additionally, healthcare
providers are seeking comprehensive dialysis offerings, which vary by region,
to serve patients based on clinical need, existing infrastructure and
reimbursement policy.

The transaction will provide a number of long-term growth opportunities for
Baxter around the world. With a broad and complementary dialysis product
portfolio, Baxter can accelerate product sales in established markets such as
Europe, where Gambro has an extensive footprint. Baxter can also expand
Gambro’s reach in high-growth regions of Latin America and Asia-Pacific, where
Baxter has steadily grown its peritoneal dialysis (PD) business. In addition,
Baxter will also build upon its pipeline of investigational home HD and
automated PD systems by adding Gambro’s highly innovative and next-generation
monitors, dialyzers, devices and dialysis solutions.

Excluding special items, the company expects this transaction to be dilutive
to adjusted earnings per diluted share by $0.10 to $0.15 in 2013 and neutral
to modestly accretive to adjusted earnings per diluted share in 2014.
Excluding the impact of special items and estimated amortization of intangible
assets, the company expects this transaction to be neutral to adjusted
earnings per diluted share in 2013, and accretive in 2014 by $0.20 to $0.25
per diluted share. 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 approximately $300 million by 2017. Baxter now expects over
its five-year long-range financial plan to increase sales (excluding the
impact of foreign currency) by 7 to 8 percent and to grow adjusted earnings
per diluted share in the 8 to 10 percent 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 approximately 40 percent. The closing of the transaction is
subject to regulatory approvals and other customary closing conditions and is
expected to occur in the first half of 2013.

J.P. Morgan acted as financial advisor and Kirkland & Ellis LLP acted as legal
advisor to Baxter.

Conference Call

Baxter will host a conference call with financial analysts and investors to
discuss this news release today at 7:30 a.m. Central Standard Time (8:30 a.m.,
Eastern Standard Time). To access the call, please dial 855-213-3946
(domestic) or 347-983-2217 (international). The conference ID for the call is
77554662. Please dial into the call several minutes prior to the start of the
call to allow sufficient time for the operator to connect participants.A
simultaneous webcast of the conference call for investors and other interested
parties may be accessed by visiting the Baxter website at www.baxter.com.
Slides relating to the investor presentation are available on the investor
relations section of Baxter’s website. A replay of the webcast also will be
available approximately two hours after the live webcast by visiting
www.baxter.com.

About Baxter

Baxter International Inc., through its subsidiaries, develops, manufactures
and markets products that save and sustain the lives of people with
hemophilia, immune disorders, infectious diseases, kidney disease, trauma, and
other chronic and acute medical conditions. As a global, diversified
healthcare company, Baxter applies a unique combination of expertise in
medical devices, pharmaceuticals and biotechnology to create products that
advance patient care worldwide.

This release includes forward-looking statements concerning a definitive
agreement entered into by the company to acquire Gambro, including
expectations regarding the financial impact of such acquisition on the
company, its long-range plan and dividend payout ratio. The statements are
based on assumptions about many important factors, including the following,
which could cause actual results to differ materially from those in the
forward-looking statements: the ability of the company and Gambro to obtain
required regulatory approvals and satisfy closing conditions; the company’s
ability to close the transaction, successfully integrate the business and
realize the benefits of the acquisition, including with respect to cost
synergies; continued strength in the company’s financial position, including
cash flows; actions of regulatory bodies and other governmental authorities;
changes in laws and regulations; and other risks identified in Baxter's most
recent filing on Form 10-K and other SEC filings, all of which are available
on its website. Baxter does not undertake to update its forward-looking
statements.

Contact:

Baxter International Inc.
Media Contacts:
Deborah Spak, (224) 948-2349
Bill Rader, (224) 948-3931
Christy Noland, (224) 948-4380
or
Investor Contacts:
Mary Kay Ladone, (224) 948-3371
Clare Trachtman, (224) 948-3085
 
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