Subject: Baxter Board Clears Strategy to Spin Off Non-Hospital Lines
Date: Published: 6/15/92 (45 lines)
Source: Wall Street Journal. Copyright Dow Jones & Co. Inc.

    Business Brief:
    Baxter Board Clears
    Strategy to Spin Off
    Non-Hospital Lines

    DEERFIELD, Ill.  -- Baxter International Inc. said its
 board approved a plan to spin off its businesses that provide
 products and services for home care and other non-hospital
 therapy.
    The hospital supply concern said shareholders will receive
 100% of the new stock of its so-called alternate-site
 division, which consists of Caremark Inc., the orthopedic
 services division, and the prescription service division.  The
 company will be called Caremark and its stock will trade
 separately.
    The alternate-site business, which provides such services
 as AIDS care at home, accounts for about 15% of Baxter's
 sales.  Sales in those businesses exceeded $1 billion in 1991
 and have been growing more than 20% a year over the past four
 years.  Baxter's renal therapy business isn't included in the
 spinoff.
    Baxter said the spinoff is "the best way to achieve the
 range of objectives that we've set," such as making the
 businesses more competitive and to resolve conflicts between
 the alternate-site businesses and its core hospital
 customers.
    Baxter sometimes creates hostility at hospitals by seeking
 to lure patients away.  Spinning off the operations, Baxter
 said, will also permit the company to achieve its earnings
 and return-to-capital objectives.  Baxter's shares have been
 trading at a price-earnings ratio of about 17, compared with
 ratios ranging from 21 to 50 for competitors in the
 alternate-health-care field.
    Baxter said that while full details of the spinoff haven't
 been worked out, the transaction is expected to be completed
 by year end.

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