Vyaire is designed to be a pure play global respiratory business
Becton, Dickinson and Co. (BD) has successfully off-loaded the respiratory business acquired in its CareFusion purchase, finalizing its joint venture with private equity firm Apax Partners to create Vyaire Medical. Apax anted up around $500 million and will own 50.1 percent of Vyaire while BD retains 49.9 percent.
“We have determined that the Respiratory Solutions business and its associates will be best served under a different ownership model that will provide more strategic focus and investment to grow the business into a pure-play, global respiratory care leader,” said Tom Polen, president of BD’s Medical Segment, in a statement when the deal was first announced in March.
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With a global footprint and more than 5,000 employees, Vyaire instantly becomes a huge player in respiratory health. The new company acquires all of BD’s respiratory business lines, providing respiratory diagnostics, ventilation, patient monitoring and anesthesia, and is expected to bring in around $800 million in annual revenue. More than 400 million people worldwide suffer from chronic respiratory diseases, particularly asthma and COPD. The global market for respiratory and anesthesia devices is expected to exceed $24 billion by 2020.
Despite the potential size of the market, BD had been looking for a partner to help them divest this piece of their business. Respiratory was performing unevenly and was not a particularly good fit for the company.
“Respiratory Solutions has its own unique call point – different than other BD businesses – and limited opportunities for ‘whole-hospital’ capital deals,” said company spokesman Troy Kirkpatrick in an email. “As a result, BD believed that Respiratory Solutions would have a better opportunity to succeed and serve customers under a new owner.”
Given Vyaire’s annual earnings and the market potential in respiratory diseases and anesthesia, the $500 million price tag seems like a good deal for Apax. However, BD will still share in the profits and has great confidence that, as majority owner, Apax will be better positioned to increase the company’s value.
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“In the healthcare sector [Apax] have completed more than 80 investments, including in medical devices, pharmaceuticals and healthcare services,” said Kirkpatrick. “This business is more valuable in Apax’s hands as they can best maximize value. As a new, standalone company, Apax as the majority owner will have the opportunity to invest, make decisions and drive profitability as their primary focus.”
BD will use proceeds from the deal to repurchase shares. In addition, the company is now freed to focus more closely on consolidating and growing their core business.
“While we have made great process, we remain intently focused on driving the CareFusion integration,” said Kirkpatrick, “realizing cost and revenue synergies, and addressing customer needs in key areas such as medication management.”
Photo: Vyaire Medical
