After a six-month search, BOC Group last week agreed to divest its Ohmeda healthcare business in a $1 billion, three-way sale to Becton Dickinson, Franklin Lakes, N.J.; Baxter International, Deerfield, Ill.; and Instrumentarium Corp., Helsinki, Finland.
BOC announced last July that it would shed Ohmeda to focus on its core business, supplying gasses such as oxygen and nitrogen in bulk to industry. Formerly known as British Oxygen Co., BOC hired investment banker J.P. Morgan to essentially auction off Ohmeda last year. The three winning bidders emerged in the auction process.
Based in Liberty Corner, N.J., Ohmeda had profits of about $73 million on sales of about $783 million for the fiscal year ended Sept. 30, 1997. The unit accounted for 11% of sales but only 9% of BOC profits.
Contrary to its original plan, however, BOC decided to split the company among multiple buyers. "We had a strong preference to sell the business as a whole because it would be easier for us," said Chris Marsay, a BOC spokesman. "But in the end we would realize more value for the shareholders by selling it in parts."
Under the deal completed last month, Becton Dickinson would pay $452 million for Ohmeda's intravenous and invasive monitoring product lines. Baxter would shell out $104 million for the anesthesia drug unit. And Instrumentarium would spend $494 million for the unit that makes ventilators, anesthesia delivery and monitoring equipment.
The deal does not require a vote by BOC shareholders, but antitrust regulators in the U.S. and Europe must approve it, a BOC spokesman said. The company did not estimate when the deal is expected to close.
A spokeswoman said Baxter is hopeful its purchase of the drug unit will close by midyear.
At deadline, Becton Dickinson was unable to provide a spokesman for comment.
Meanwhile, Baxter last week reported a 15% increase in net income for the fourth quarter ended Dec. 31, to $182 million, or 64 cents per share, from $158 million, or 57 cents per share, in the year-ago quarter. Revenues grew 9% to $1.6 billion.
But, for the year, net income fell 55% to $300 million, or $1.08 per share, from $669 million, or $2.46 per share, in the year-ago period. Acquisition-related charges of $1.27 per share helped depress profits. Revenues rose 13% to $6.1 billion.