According to the press release, in exchange for the Hospira division, which Pfizer acquired in September 2015, Pfizer will receive $600 million in cash and $400 million in ICU Medical stock. After the acquisition, Pfizer will own approximately 16.6% of ICU. Furthermore, Pfizer will have the right to nominate one director to ICU’s board as long as it holds 10% or more of ICU’s stock.
According to the Hospira Infusion Systems website, its products include IV pumps, solutions, and devices. Vivek Jain, ICU Medical’s CEO, explained that:
“By acquiring the Hospira Infusion Systems business, currently our largest single customer, we create a pure-play infusion business with the focus and scale to compete globally, eliminate our single customer concentration issue, and have a significant value creation opportunity as a much larger company.”
Jain further noted that Hospira has been using ICU’s licensed technology for more than 20 years.
Reuters reported that ICU Medical’s shares jumped 14 percent after the news.