San Clemente-based ICU Medical Inc. said Monday it plans to pay Hospira Inc. $35 million for a Salt Lake City plant.
The acquisition is part of a larger pact inked by the companies.
The pact calls for ICU, a maker of medical connectors and intravenous systems, to make critical care products at the plant, plus develop catheters, angiography kits and cardiac monitoring systems with Hospira.
Lake Forest, Ill.-based Hospira will continue selling the critical care products produced in Salt Lake City under its own name. It also will retain responsibility for selling the products, which includes marketing, contracts, customer service and distribution.
This new partnership is the latest in a 10-year relationship between ICU and Hospira, a spinoff of Abbott Laboratories. The close relationship between ICU and Hospira has caused analysts some concern in the past.
In fact, when Hospira cut its buying of ICU’s Clave intravenous device last year, ICU’s sales fell 35% in the third quarter. Hospira still accounted for more than half of ICU’s sales in the period.
But ICU said the dip in sales to Hospira was only temporary. Analysts will be looking for ICU to rebound this year. Its key device is the Clave, a needle-free system for delivering intravenous fluids.
“We are thrilled with this opportunity to further expand our portfolio of custom product offerings and strengthen our relationship with Hospira by working jointly on future development efforts for custom critical care products,” said George Lopez, ICU’s chairman and president, in a statement.
Hospira will take a $20 million charge associated with the sale of its plant.
