Pall is selling certain assets of its blood collection, filtration, and processing product lines to Haemonetics for roughly $550 million. The transaction includes related systems as well as equipment for transfusion medicine and involves the transfer of manufacturing facilities in Covina, CA, Tijuana in Mexico, Ascoli in Italy, and a portion of Pall’s operations in Fajardo, Puerto Rico. Separate from these manufacturing facilities, Pall will also transfer related blood media manufacturing capability to Haemonetics.
The transfer of the related media lines is expected to be completed by 2016. Until that time, Pall will provide these media products under a supply agreement. Upon closing, approximately 1,300 employees will transition to Haemonetics.
Under the terms of the agreement, approximately $535 million will be paid upon closing. The company estimates that the after-tax proceeds related to this payment will be approximately $430 million. The balance will be payable upon Pall’s delivery of certain media assets to Haemonetics. The company expects to record an after-tax gain of $230–$240 million, or $1.95–$2.04 per share, upon closing.
Headquartered in Braintree, MA, Haemonetics provides innovative blood-management solutions. “The assets from Pall will provide us with a meaningful commercial presence in all aspects of whole blood collection, with leading filter technology and manufacturing capability, a broad portfolio of manual collection and processing products, and stronger relationships with major blood authorities and key customers we have in common,” remarks Brian Concannon, Haemonetics’ president and CEO.
Larry Kingsley, president and CEO of Pall, notes, “As a result of the transaction, Pall will increase its focus on businesses and markets where our competitive advantages are greatest. The impact of this decision is that Pall’s overall profitability profile and long-term growth rate will be enhanced.”
Revenue for the product lines being divested is expected to be approximately $230 million in Pall’s fiscal year 2012, inclusive of OEM sales to Haemonetics. Operating profit for fiscal 2012 is expected to be about $60 million. The company estimates that the blood product line will contribute approximately $0.38 to EPS in fiscal year 2012, net of pro forma tax effect. Cost reductions and profit from the supply agreement are expected to largely offset any long-term dilution from the transaction.