Panasonic Healthcare has closed its purchase of the Bayer Diabetes Care business for about $1.1 billion. The deal was originally disclosed in June and was funded in part by well-known hedge fund KKR, which holds 80% of Panasonic Healthcare with the remainder owned by the larger Panasonic corporate entity.
The acquired business will operate as a stand-alone company known as Ascensia Diabetes Care. Along with Panasonic Healthcare, the newco is expected to continue to develop, manufacture and market blood glucose monitoring meters and strips globally.
"Our goal is to ensure high-quality technologies and diabetes care solutions are available to all patients who need them. Bringing together Panasonic Healthcare and Ascensia Diabetes Care will significantly help to achieve this goal," said the President of Panasonic Healthcare Hidehito Kotani in a statement.
He continued, "Together with KKR, the companies will be able to serve more patients in more places across the globe with world-class products. We greatly look forward to expanding this business and innovating new solutions at this integral point in the diabetes care industry."
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| Contour blood glucose meter--Courtesy of Bayer |
The Bayer Diabetes Care Business had €909 million ($1 billion) in 2014 sales, with the business primarily driven by sales of the Contour blood glucose monitor products. Ascencia will be headed by Michael Kloss, the head of Bayer Diabetes Care since 2013. The company sells products in 125 countries worldwide; it will have about 1,400 employees in 38 countries after the close of the deal in all the countries.
A staggering 9% of the global population has diabetes, according to the latest World Health Organization estimate, and in many poorer nations it is uncommon for diabetic patients to self-monitor blood glucose levels.
KKR and Panasonic likely are betting that the relatively inexpensive blood glucose monitors marketed by Bayer could change all that, appealing to the ever-growing diabetic population. An estimated 1.5 million deaths were attributed to diabetes in 2012, with more than 80% of those occurring in low- and middle- income countries.
Earlier this year, competitor Abbott ($ABT) offered a slightly different approach to address the same issue. It launched a physician blood glucose monitor in India that works via a quarter-sized sensor attached to the back of a diabetic patient's arm that is reapplied every 2 weeks and records data every 15 minutes.
Ascensia is focused on global growth but innovation won't be entirely off the table. "It has a strong pipeline and will continue to invest in research and development of new products that will help to improve patient care," concluded KKR Europe, Africa and Middle East Head Johannes Huth.
- here is the statement