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Baxter's Latest Acquisition to Boost Advanced Surgery Arm

Zacks Equity Research

Baxter International BAX recently completed its previously-announced acquisition of Seprafilm Adhesion Barrier and related assets from Sanofi for a deal value of $350 million. The buyout is expected to boost Baxter’s Advanced Surgery unit.

Following the release, shares of the Zacks Rank #3 (Hold) company rose 1% to $93.16 at close.

For investors’ notice, Baxter had entered a definitive agreement to acquire Seprafilm Adhesion Barrier and related assets from Sanofi last December. Notably, France-based Sanofi is a pharmaceutical company, providing healthcare solutions in more than 170 countries.

How Does Baxter Stand to Gain?

Sanofi’s Seprafilm product family is used to reduce the incidence, extent and severity of adhesions in pelvic and abdominal surgeries. With a solid presence in the United States, Japan, China, South Korea and France, this product family is likely to expand Baxter’s Advanced Surgery product portfolio.

Thus, Baxter’s hospital and surgery customers will gain access to Seprafilm products apart from the company’s flagship hemostats and sealants.

Moreover, Allied Market Research projects the global surgical equipment market to reach a worth of $15.74 billion by 2023, at a CAGR of 7%.

Hence, Baxter’s latest acquisition has been a well-timed one.

Advanced Surgery at a Glance

Baxter’s Advanced Surgery offers clinically differentiated surgical care products which treat hemostasis, tissue sealing, reconstruction, tissue repair, intraoperative patient care and inhaled anesthesia. The segment has been a significant contributor to the company’s top line.

Some of the key products in the unit are FLOSEAL Hemostatic Matrix, TISSEEL for surgical care, ACTIFUSE Bone Graft and COSEAL Surgical Sealant.

Notably, in recent times, the segment saw an 8% year-over-year rise in revenues, driven by strength in hemostats and sealants.

Price Performance

Reflective of these, over the past year, shares of Baxter have rallied 25.9% outperforming the industry’s 8.9% rise.

Key Picks

Some better-ranked stocks in the broader medical space are AmerisourceBergen Corporation ABC, Cardinal Health CAH and Patterson Companies PDCO, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

AmerisourceBergen’s long-term earnings are expected to grow 7.4%.

Cardinal Health’s long-term earnings are projected to rise 6.2%.

Patterson long-term earnings are estimated to climb 6.4%.

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Baxter International Inc. (BAX) : Free Stock Analysis Report
 
Cardinal Health, Inc. (CAH) : Free Stock Analysis Report
 
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Patterson Companies, Inc. (PDCO) : Free Stock Analysis Report
 
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