Haemonetics to offload whole-blood business for up to $67M

Dive Brief:

• Haemonetics said Tuesday it agreed to sell its whole-blood business to Italy’s GVS for up to $67.1 million, the latest move in the company’s recent portfolio revamp.
• GVS will pay $44.6 million upfront for the business plus up to $22.5 million over the next four years contingent on achieving certain revenue and profit targets.
• The whole-blood business has dragged on Haemonetics’ profit in recent quarters. BTIG analyst Marie Thibault, in a note to investors Tuesday, said selling the assets is “a step in the right direction” toward improving margins.

Dive Insight:

Haemonetics has been restructuring over the past few years with a plan to improve product and service quality, reduce manufacturing and supply chain costs, and offset inflationary pressures and the effects of the COVID-19 pandemic.

Along the way, the Boston-based company discontinued some products in its blood center business and paid $253 million to acquire OpSens, whose guidewires are used in cardiac procedures. Haemonetics also paid $160 million upfront for Attune Medical, maker of a device to protect the esophagus during radiofrequency ablation.

“As part of our long-range plan we are focused on portfolio evolution to enhance our leadership in commercial and non-commercial plasma and expand our presence in high-growth hospital markets,” Haemonetics CEO Chris Simon said in a Tuesday statement.

GVS, a diversified filtration technology company, will acquire Haemonetics’ portfolio of whole-blood collection, processing and filtration products. It will also acquire a manufacturing facility in Covina, California, and related equipment and assets at a plant in Tijuana, Mexico.

Haemonentics had planned to close the Covina facility and lay off its 75 employees before announcing the sale to GVS, but that location will now continue to operate.

“The plant will remain open and some Haemonetics employees at Covina will be offered employment with GVS to support manufacturing there following completion of the transaction,” a company spokesperson said in an email Wednesday.

The whole-blood business saw revenue decline by 9.7% to $31.3 million in the six months ended Sept. 28.

Haemonetics plans to use the proceeds from the sale for general corporate purposes and to invest in growth initiatives. The deal is expected to close in the first quarter.

GVS’ offer is “reasonable” given the “poor growth profile” of the whole-blood business, said Needham analyst Mike Matson.

“We believe that the divestiture is a positive for [Haemonetics] since it should improve [Haemonetics’] organic revenue growth and margins,” Matson wrote to clients.

Haemonetics said its remaining blood center business will continue to manufacture a full line of apheresis products for automated blood collection, including devices and disposable kits for platelets, plasma and red cells.

The transaction follows Haemonetics’ 2020 agreement to sell its Fajardo, Puerto Rico, manufacturing operations to GVS and enter into a long-term agreement giving GVS exclusive rights to manufacture and supply blood filters produced at the facility for Haemonetics.