Pfizer is selling its global infusion therapy business, Hospira Infusion Systems (HIS), to ICU Medical for $1 billion. The proposed merger will create a leading infusion therapy company with estimated pro forma revenues of $1.45 billion.

HIS, which makes intravenous pumps, solutions and devices, was bought by Pfizer as part of its $16 billion purchase of US rival Hospira in 2015 and is ICU Medical’s largest customer.

Under the terms of the deal, Pfizer will receive approximately $400 million in newly issued shares of ICU Medical common stock, giving it an ownership of around 16.6%, as well as $600 million in cash.

ICU Medical’s CEO, Vivek Jain, explained that the merger was the natural evolution of a relationship that began more than 20 years ago when HIS began integrating ICU Medical’s needle-free technology into its global offering. “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,” he said.

The transaction, which remains subject to the usual closing conditions and regulatory approvals, is expected to complete in the first quarter of 2017.

ICU Medical has also updated its financial outlook following preliminary third-quarter results that beat Wall Street expectations. The company now expects to report full-year 2016 results slightly above the high end of its previously announced guidance of $370 million revenue and $131 million of EBITDA. For 2015, revenue reached nearly $342 million, and EBITDA was $114 million.