Medical device maker Baxter International will divest its BioPharma Solutions business to private equity firms Advent International and Warburg Pincus for $4.25 billion in cash.

Baxter looks to use the after-tax proceeds, estimated at $3.4 billion, to reduce its debt, which stood at almost $17 billion at the end of March 2023 after it purchased medical device maker Hill-Rom Holdings for $10.5 billion in 2021.

The company expects the deal, which is expected to close in the second half of 2023, to reduce fourth-quarter earnings by about $0.10 a share.

BioPharma Solutions, which has about 1,700 employees in Indiana and Germany, brought in $644 million in sales in 2022, a 4% drop from $669 million reported the previous year. It’s expected to generate $600 million in revenue this year.

“Today represents an important step in Baxter’s ongoing transformation journey as we continue to execute against our strategic priorities, enhance our focus and create additional value for all our stakeholders,” said José (Joe) E. Almeida, Chairman, President and Chief Executive Officer at Baxter.

Under Advent and Warburg’s ownership, the unit will operate as a stand-alone contract development and manufacturing organization.

Both private equity firms have been involved in the biotech and pharma sectors. Warburg Pincus has invested in a range of healthcare companies, including Insilico Medicine, an AI drug discovery platform, and Summit Health, a medical practice that was recently acquired by the Walgreens Boots Alliance. Advent International has backed CRO Syneos Health, generic maker Zentiva and Viatris.

Baxter had said in February it was planning a “series of changes” to “meaningfully simplify” operations, a plan that included the January announcement that it was spinning off its Renal Care and Acute Therapies businesses, following a trend of paring down units among other drugmakers including GSK Plc, Pfizer Inc. and Johnson & Johnson.