VWR Acquires Baxter Division
By Lisa A. Coleman
West Chester, PA–VWR Scientific has acquired the Industrial and Life Sciences Division of Baxter International Inc. (McGaw Park, IL) for $400 million and will become the exclusive distributor for Baxter`s critical environment products for the non-patient care market. The acquisition, which will be completed this quarter, makes VWR the largest distributor of cleanroom and laboratory supplies worldwide.
Helping to finance the acquisition is EM Industries, the U.S. affiliate of E. Merck (Darmstadt, Germany), which will buy about $95 million in stock and boost its stake in the company from 14 to 46 percent. After a four-year standstill agreement, E. Merck will be allowed to increase its equity in VWR, which could lead to a possible acquisition. Because of this partnership, VWR will be able to tap into E. Merck`s distribution companies. Says VWR`s Vice President of Marketing Hal Nichter: “When we include that level of access to customers, we`ll be the largest laboratory supplies distributor in the world.”
According to Nichter, the acquisition will also capitalize on a recent trend: product consistency throughout a company`s multiple sites. “Some larger multi-national companies would like to make certain product decisions for their cleanrooms, and have all their facilities use that standard global access to products,” says Nichter.
Because the distribution structure is expanding, critical environment products will be able to reach more international customers, says Michael Scheerer, Baxter`s vice president of sales and marketing for the company`s Scientific Industrial Critical Environments. Scheerer also sees rapid expansion into the pharmaceutical manufacturing market for critical environment products due to VWR`s strong presence in this industry.
Baxter`s distribution operations will be completely integrated with VWR over the next 12 to 18 months with Baxter providing support through a service agreement for up to two years. According to Jerrold B. Harris, president and CEO of VWR Corp., the company expects new business opportunities to arise across product lines, including Baxter`s critical environment products and services and VWR`s furniture products. Last October, VWR acquired Baxter`s Canadian distribution operations which resulted in significant growth for VWR.
Following the acquisition, VWR will change its name to VWR Scientific Products Corp., and projects annual revenues of $1 billion. VWR is one of the United States` largest distributors of laboratory supplies, chemicals and equipment. Baxter International is a manufacturer of health-care products and services. Baxter concentrates on R&D programs in biotechnology, cardiovascular medicine, renal therapy and related medical fields.
VWR will acquire the accounts receivable and other selected assets of Baxter`s industrial distribution division which represent 2,000 manufacturers and more than 45,000 customers. VWR expects that all Baxter employees will become VWR Scientific Products Corp. employees.
In other acquisition news, Ansell International, a division of Pacific Dunlop (Melbourne, Australia), agreed to purchase the medical glove division of Smith & Nephew Perry (Massillon, OH). The Perry Division was sold for $50 million. It manufactures and distributes advanced specification surgery and medical examination gloves. According to Philip Brass, managing director of Pacific Dunlop: “Perry complements Ansell`s existing operations and products exceptionally well providing a major link in Ansell`s surgical and medical glove market strategy worldwide.” Brass expects Ansell to bring more cutting-edge technology to market, especially in the synthetic polymer glove and powder-free glove arena. n