Baxter International Inc. (BAX) saw its stock drop sharply on Tuesday, falling 6.6% to $34.51, after the company agreed to sell its kidney care segment to Carlyle Group for $3.8 billion. The decline pushed Baxter’s shares below their 50-day moving average, according to MarketSurge.
The sale of Baxter’s Vantive Kidney Care segment, which accounted for approximately 30% of its total revenue with $4.45 billion in sales last year, was expected to fetch a higher price from investors. Evercore ISI analyst Vijay Kumar attributed the lower-than-anticipated deal value to renal issues and timing constraints.
Carlyle, in partnership with Atmas Health—a consortium of healthcare industry veterans—will acquire the kidney care unit. Atmas Health’s Kieran Gallahue will take on the role of chairman of Vantive, while Chris Toth, Baxter’s current EVP and Group President for the kidney care division, will serve as the new CEO.
Despite the stock’s decline, Baxter remains optimistic about its future prospects. The company expects to receive $3 billion in net cash from the transaction and has raised its sales growth guidance to 4%–5% for 2024, up from the previously forecasted 3%. Baxter’s adjusted operating margin for 2025 is projected to be 16.5%, which could help buffer the company’s stock.
Following the earnings report in early August, Baxter’s shares initially rose 6.6% and approached their 200-day moving average. However, the stock’s recent drop underscores investor concerns over the deal’s impact and future earnings potential.
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