|Baxter CEO Robert Parkinson|
Baxter International ($BAX) is riding high off positive second-quarter earnings, numbers that the company largely attributes to its 2013 acquisition of Swiss dialysis heavyweight Gambro.
The Deerfield, IL-based company saw sales for its medical product business increase by 24% to $2.51 billion during Q2 2014, with its dialysis division posting an eye-popping 60% year-on-year growth, Reuters reports. Acquiring Gambro in 2013 gave the company's renal therapies unit a boost and positioned Baxter to become the market leader for infusion systems and surgical products.
''The combination of these two respected renal leaders--Baxter and Gambro--will enable Baxter to better serve healthcare providers and patients through a collective offering of innovative renal products and therapies,'' CEO Robert Parkinson said in a statement when the deal closed. ''Together, we will advance the state of dialysis care for patients with kidney disease worldwide.''
|Baxter bioscience chief Ludwig Hantson|
Promising sales numbers bode well for Baxter as it prepares to split its business units in two. In March, the company announced that it would divide into two separate entities, one focused on medical products and the other concentrated on biopharmaceuticals. Baxter's medical device business--the larger of the two units--generated more than $9 billion in sales in 2013 and will keep the Baxter International name. The biopharmaceutical arm will be headed by current Baxter bioscience chief Ludwig Hantson and will zero in on bleeding disorders and immune deficiencies.
The company expects to complete the separation by mid-2015 but needs to clear regulatory and corporate hurdles first.
Baxter is not the only company looking to spin off business units to grab a bigger market share. Abbott Laboratories ($ABT) recently sold its generic drug business to Mylan ($MYL) for $13 billion and in January 2013 spun off its drug business into a separate operation called AbbVie ($ABBV). In June 2013, Covidien ($COV) spun off its drug business into Mallinckrodt ($MNK), shifting its attention to the medical device market.
- read the Reuters story
Special Report: The top 10 med tech M&A deals of 2013 - Baxter and Gambro