ICU Medical to Buy Pfizer’s Infusion Unit for $1 Billionby
Deal to quadruple ICU Medical’s sales; stock jumps to record
Pfizer will own 17 percent of ICU Medical in transaction
ICU Medical Inc. will acquire Pfizer Inc.’s infusion systems unit for $1 billion in cash and stock, buying out its biggest customer in a deal that will more than quadruple its annual sales.
ICU Medical’s stock jumped to an all-time intraday high of $146.76. With the purchase, ICU Medical, a maker of disposable systems for IV therapy with $342 million in revenue last year, will be able to better compete in the U.S. and extend its global presence with direct operations in more than 20 countries. Pfizer will become its biggest shareholder, according to data compiled by Bloomberg.
The unit includes IV pumps, solutions and devices that when added to ICU Medical’s existing business will yield estimated pro forma combined revenues of about $1.45 billion, the companies said in a statement Thursday.
ICU Medical, based in San Clemente, California, was up 12 percent to $141.50 at 11:22 a.m. in New York, after earlier rising to $147.76, its highest intraday level since the shares began trading in 1992.
Pfizer had bought the infusion-systems assets as part of its $17 billion purchase of Hospira last year. The New York-based pharma giant will receive approximately $400 million in newly issued shares of ICU Medical common stock and $600 million in cash, according to the statement. Pfizer will own about 17 percent of ICU Medical, and as long as it holds 10 percent or more of the company’s equity, it will have the right to nominate one director to ICU Medical’s board, according to the companies.
ICU Medical’s financial advisers for the transaction were Barclays Plc and Wells Fargo & Co., while Latham & Watkins acted as its legal adviser. Goldman Sachs Group Inc. and Guggenheim Securities served as Pfizer’s financial advisers, while Skadden, Arps, Slate, Meagher & Flom LLP and Ropes & Gray LLP its were legal advisers.