Item 1.01 Entry into a Material Definitive Agreement.
On May 8, 2023, Baxter International Inc. (the "Company"), Baxter Healthcare
Corporation, a Delaware corporation, Baxter Deutschland Holding GmbH, a German
limited liability company, and Gambro Dialysatoren GmbH, a German limited
liability company, each a subsidiary of the Company, entered into an Equity
Purchase Agreement (the "Purchase Agreement") with Bamboo US BidCo LLC, a
Delaware limited liability company, and Blitz 23-317 GmbH, a German limited
liability company (collectively, "Buyer") to sell all issued and outstanding
limited liability company interests of Baxter Pharmaceutical Solutions LLC
("BPS") and all issued and outstanding equity interests of Baxter Oncology GmbH
("BOG" and together with BPS, the "Divested Entities") to Buyer for an aggregate
purchase price of $4.25 billion in cash, subject to certain adjustments (the
"Transaction").
The Transaction is subject to the satisfaction of customary closing conditions,
including the expiration or termination of the waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended; competition
clearances in the European Union, China, South Korea and Switzerland and a
foreign direct investment filing in Germany; the absence of any law or order
enjoining or otherwise prohibiting the Transaction; the accuracy of the
representations and warranties of the other party; compliance of the other party
with its covenants in all material respects; and the execution of certain
ancillary agreements. These agreements include a supply agreement pursuant to
which the Divested Entities will produce certain pharmaceutical products and
services for certain subsidiaries of the Company for terms up to nine years
(subject to extension by mutual agreement of the parties for certain of the
products) and a transition services agreement, each in accordance with the
Purchase Agreement. For the full year 2022, approximately 10% of the net sales
from the Company's Pharmaceuticals product category came from products that will
be manufactured and supplied to the Company by the Divested Entities under the
supply agreement after closing of the Transaction. Subject to the satisfaction
or waiver of certain conditions and the other terms and conditions of the
Purchase Agreement, the Transaction is expected to close in the second half of
2023.
The Purchase Agreement contains representations, warranties and covenants that
are customary for a transaction of this type, including, among others, covenants
by the Company to conduct the business of the Divested Entities in the ordinary
course between execution of the Purchase Agreement and closing of the
Transaction.
The Purchase Agreement contains customary termination rights, including if the
closing of the Transaction has not occurred on or prior to February 29, 2024,
subject to one potential extension by either party until April 30, 2024 under
certain circumstances.
The foregoing description of the Purchase Agreement and the transactions
contemplated thereby does not purport to be complete and is subject to, and
qualified in its entirety by, the full text of the Purchase Agreement, which is
filed as Exhibit 2.1 to this Current Report on Form 8-K and incorporated herein
by reference.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
On May 4, 2023, Mr. James K. Saccaro notified the Company of his decision to
resign as the Company's Executive Vice President and Chief Financial Officer
("CFO"), effective as of May 31, 2023, to join a company in the heathcare
industry. Mr. Saccaro's decision to leave the Company was not the result of any
disagreement relating to the Company's operations, policies or practices.
Mr. Saccaro served as the Company's CFO since 2015. Brian C. Stevens, the
Company's Senior Vice President, Chief Accounting Officer and Controller, will
assume the role of interim CFO on such date (or such earlier date, in the event
Mr. Saccaro were to resign or otherwise stop serving in his role as CFO, the
"Commencement Date")) and also continue to serve in his current role while the
Company undertakes an executive search process for a permanent CFO.
Mr. Stevens, 49, joined Baxter in 2018 as Senior Vice President, Chief
Accounting Officer and Controller. Before joining Baxter, Mr. Stevens worked for
Groupon, Inc., where he most recently served as treasurer and chief accounting
officer. He had served as Groupon's chief accounting officer from 2012 to 2016
before assuming the treasurer role. Prior to joining Groupon, Mr. Stevens spent
16 years with KPMG LLP, most recently as an audit partner.
Mr. Stevens received his bachelor of science degree in accountancy from the
University of Illinois at Urbana-Champaign and is a licensed certified public
accountant in Illinois and New York.
Mr. Stevens does not have any family relationships with any of the Company's
directors or executive officers, there are no arrangements or understandings
between Mr. Stevens and any other persons pursuant to which he was selected as
an officer, and there are no transactions between Mr. Stevens and the Company
that would be required to be reported under Item 404(a) of Regulation S-K.
In connection with his appointment, the Company entered into amended
compensation arrangements with Mr. Stevens providing the following additional
compensation that is commensurate with his additional duties as interim CFO: a
payment of $50,000 per month for each month Mr. Stevens serves in this capacity,
and a one-time special award of restricted stock units with a value of $250,000
on the first quarterly off-cycle grant date on or after the Commencement Date,
which will be scheduled to vest on the second anniversary of the grant date.
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Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal
Year
On May 6, 2023, the Board of Directors of the Company approved an amendment and
restatement of the Company's Amended and Restated Bylaws (the "Amended and
Restated Bylaws") in order to streamline the provisions relating to the
appointment of officers by simplifying the description of duties for certain
positions in Article IV and making certain other conforming changes.
The foregoing summary is qualified in its entirety by reference to the text of
the Amended and Restated Bylaws, a copy of which is attached hereto as Exhibit
3.1 and is incorporated herein by reference.
Item 7.01. Regulation FD Disclosure.
On May 8 and 9, 2023, the Company issued press releases announcing the
Transaction and the CFO transition (as described in Item 5.02), respectively.
Copies of these press releases are filed as Exhibits 99.1 and 99.2 to this
Current Report on Form 8-K, respectively, and are incorporated herein by
reference.
The information in this Item 7.01 shall not be deemed filed for purposes of
Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), or otherwise subject to the liabilities of that Section, nor shall it be
deemed incorporated by reference in any registration statement or other filing
under the Securities Act of 1933, as amended, or the Exchange Act, except in the
event that the Company expressly states that such information is to be
considered filed under the Exchange Act or incorporates it by specific reference
in such filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit
No. Description of Exhibits
2.1 Equity Purchase Agreement, dated May 8, 2023, by and among Baxter
International Inc., Baxter Healthcare Corporation, Baxter Deutschland
Holding GmbH, Gambro Dialysatoren GmbH, Bamboo US BidCo LLC and Blitz
23-317 GmbH
3.1 Amended and Restated Bylaws, dated May 6, 2023
99.1 Press Release regarding the Transaction, dated May 8, 2023
99.2 Press Release regarding the CFO transition, dated May 9, 2023
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document)
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