Pfizer to sell infusion business to ICU Medical, take stake
By Ransdell Pierson
(Reuters) - Pfizer Inc said on Thursday it would sell its global infusion therapy business to ICU Medical Inc for $1 billion in cash and stock that will give it a major stake in the smaller company.
Pfizer had acquired the hospital infusion system business, which has annual sales of about $1.2 billion, through its $15 billion purchase in September 2015 of Hospira, which sells generic hospital products and is developing biosimilars meant to compete with big-selling biotech drugs.
But Pfizer said in July it was exploring the possible sale of the infusion products to focus on its core pharmaceuticals business.
"They're not a strategic fit for Pfizer, which has been looking for a buyer," said John Boris, an analyst with SunTrust Robinson Humphrey.
Pfizer will receive $600 million in cash and nearly $400 million in newly issued shares of ICU Medical, giving it a stake of about 16.6 percent in the company.
ICU Medical's shares jumped 14 percent to a 52-week high of $143.59 in late afternoon trading, while Pfizer shares slipped 0.9 percent, in line with declines for the drug sector.
Chris Lewis, an analyst at Roth Capital Partners, said the addition of Hospira's infusion pumps and intravenous solutions to ICU Medical's needle-free connectors and other intravenous accessories would create a "pure play" infusion therapy company offering a complete set of products.
"ICU has been building a war chest for acquisitions and finally delivered on the M&A front," Lewis said. Continued...