Baxter Intl Sells Diagnostics Business

Baxter International of the USA has reached an agreement to divest its diagnostics products manufacturing business to Bain Capital for around $48 million. The move is part of Baxter's strategy of refocusing its investments on biotechnology and renal therapy, and of expanding its business internationally.

The proceeds to Baxter consist of $40 million in preferred stock or debt and $408 million in cash and retained accounts receivable. The company said that proceeds from the sale will be used to further improve the company's debt-to-capital ratio, which is expected to be in the low 40% range by the end of the current year. At the end of 1993 Baxter's debt-to-capital ratio was around 50%.

Baxter retains exclusive distribution rights in the USA to the current diagnostics products for five years. Bain says that it will organize the diagnostics manufacturing business as a new company, Dade International.