Bristol-Myers Squibb Co has agreed to sell its wound therapy and surgical care unit ConvaTec to private equity firms Nordic Capital and Avista Capital Partners for $4.1 billion (€2.65 billion).
ConvaTec is a world leader in the development and marketing of innovative wound therapeutics and ostomy care products.
Bristol-Myers, which is shifting its focus to biopharmaceuticals, plans to use the proceeds from the sale to fund new projects and acquisitions.
Bristol-Myers said it is shifting focus to biopharmaceuticals and developing biotechnology medicines as they have much higher profit margins than businesses such as wound care.
The company recently sold its medical imaging business to Avista in January for $525 million and plans an initial public offer by year-end to sell about 10 to 20 per cent of its Mead Johnson nutritional business.
''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 M. Cornelius, chairman and chief executive officer, Bristol-Myers Squibb.
"These decisions support our next-generation biopharma strategy," said Cornelius, in a statement. "We will now have additional financial resources to expedite that strategy as we continue to work to help patients prevail over serious diseases," he added.
Bristol-Myers Squibb is a global biopharmaceutical company. ConvaTec, based in Skillman, New Jersey, a pioneer in developing and marketing innovative wound therapeutics and ostomy care products, has over 3,400 employees in 91 countries.
Dave Johnson, will remain the chief executive of ConvaTec after the transaction as well.
The Convatec deal is expected to close during the third quarter of the current year. The transaction is subject to regulatory approvals and delivery of ConvaTec's audited 2007 financial statements.
Citigroup Global Markets Inc and Morgan Stanley & Company Inc served as financial advisors for Bristol-Myers Squibb and Cravath, Swaine & Moore, LLP, served as legal counsel for the company.
Bear, Stearns International Limited acted as financial advisor for Nordic Capital and Avista Capital Partners and White & Case, LLP, served as legal counsel to Nordic Capital and Avista.