Bristol-Myers spins off device unit for $4.1 billion.
New York, NY-based drug company Bristol-Myers Squibb Co. is selling its wound therapy and surgical care unit for $4.1 billion to two private equity firms.
The company will sell its ConvaTec division to Nordic Capital and Avista Capital Partners. Proceeds from the sale will help fund Bristol-Myers' strategy of shifting its focus to biopharmaceuticals, company officials said. That strategy already has resulted in the $525 million sale of the company's medical imaging unit as well as plans to sell 10% to 20% of its Mead Johnson Nutritional unit.
Bristol-Myers and many other pharmaceutical companies have been attempting to regroup as once-profit-driving blockbuster drugs lose patent protection and generic drug developers cut into revenue. As a result, many companies have laid off workers. In December, Bristol-Myers Squibb said it would lay off about 4,300 employees, or 10% of its workforce, and close more than half of its manufacturing plants as part of its goal to save $1.5 billion annually by 2010.
"In December 2007, we announced our evolution into the leading next-generation biopharma company and that as part of the transformation we would undergo a thorough strategic review of our non-pharmaceutical assets," said James Cornelius, chairman and CEO of Bristol-Myers Squibb. "Since then, we have announced the sale of Medical Imaging, the proposed carve-out initial public offering of Mead Johnson and the sale of ConvaTec."
Dave Johnson, who will remain as CEO of ConvaTec, said, "I am excited to partner with Nordic Capital and Avista Capital Partners as we transition ConvaTec to a standalone company. Both firms have a proven track record of success in the healthcare industry. They are passionate believers in ConvaTec's future growth and will be strong supporters of the business. Their deep experience in guiding strategy and backing companies will help take ConvaTec to the next level of success as an independent company."
ConvaTec is located in Skillman, NJ and employs more than 3,400.