Pfizer takes equity in ICU Medical with infusion therapy business sale
American global pharmaceutical corporation, Pfizer, has agreed to sell its global infusion therapy business, Hospira Infusion Systems (HIS), for US$1 billion in cash and stock to ICU Medical, a California-based developer and manufacturer of vascular therapy, oncology and critical care medical devices.
Pfizer’s Hospira Infusion Systems business includes IV pumps, solutions, and devices that, when combined with ICU Medical’s existing businesses, will create a leading pure-play infusion therapy company, with estimated pro forma combined revenues of approximately US$1.45 billion based on trailing twelve month results as of June 2016.
Under the agreement, Pfizer will receive approximately US$600 million in cash from ICU Medical subject to customary adjustment for net working capital as well as US$400 million in newly issued shares of ICU Medical common stock, giving Pfizer 16.6% ownership stake in ICU Medical.
In addition, so long as Pfizer continues to hold 10% or more of ICU Medical’s common equity, it will have the right to nominate one director to the company’s board of directors in ICU Medical’s proxy materials, and Pfizer has agreed to certain restrictions on transfer of its shares for at least 18 months.
The acquisition complements ICU Medical’s existing business by creating a company that has a complete IV therapy product portfolio from solutions to pumps to non-dedicated infusion sets, and gives the company a significantly enhanced global footprint and a platform for continued competitiveness and growth. With an integrated product offering, ICU Medical will hold industry-leading positions in key segments and have access to the full US infusion marketplace with a compelling product portfolio.
“The combination of these two businesses is the natural evolution of a productive relationship that began more than 20 years ago when Hospira began integrating ICU Medical’s needle free technology into their infusion offering globally,” explained Vivek Jain, ICU Medical’s Chief Executive Officer. “By acquiring the Hospira Infusion Systems business, currently our largest single customer, we create a pure-play infusion business with the focus and scale to compete globally, eliminate our single customer concentration issue, and have a significant value creation opportunity as a much larger company.”
The transaction is expected to be completed in the first quarter of 2017.
Category: Features, Pharmaceuticals
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