Fresenius Medical Care AG (NYSE:FMS) had an active day on the M&A trail, announcing two deals worth a combined $2.1 billion that should bolster the company’s presence in the U.S.
The German dialysis giant, which houses its U.S. headquarters in Waltham, Mass., said it will pay $1.7 billion to acquire Liberty Dialysis Holdings Inc., a privately held company out of Mercer Island, Washington, which was owned by two private equity firms KRG Capital Partners and Bain Capital.
Liberty has annual sales of about $1 billion and operates 260 dialysis clinics. The deal, which is expected to close in early 2012, will increase the presence of FMC in the U.S., although the company may have to divest itself of some of its clinics, in order to meet regulatory clearance with the Hart–Scott–Rodino Antitrust Improvements Act, the company said in regulatory filings.
Fresenius also announced that it would snag American Access Care Holdings LLC for $385 million in cash and assumed debt. The company operates 28 outpatient centers, dedicated to serving vascular access needs of dialysis patients. FMC, which operates 13 vascular access centers, said the deal will close in the fourth quarter of 2011 and that the deal would add $175 million in annual stakes to the company’s top line.
“The acquisition enables Fresenius Medical Care to achieve critical mass in its vascular access business and has strategic importance by virtue of the scale, resources and operational efficiency it brings to its vascular access operations, particularly when considering the U.S. government’s proposal to include the type and frequency of access-related infections within the quality outcome component of the dialysis bundled reimbursement by system 2014, FMC officials said in a prepared release.
The company reported a Q2 profit of $261 million on $3.19 billion in sales during the three month period ended June 30, a 6 percent bump from the $269 million profit on $2.95 billion in sales.
Sales in North America were essentially flat compared to last year due to the “Medicare end-stage renal disease prospective payment system in the United States,” officials said in a prepared release.
Average sales per treatment for U.S. clinics decreased to $348 in the second quarter of 2011 compared to $356 for the same period last year, which officials said reflected “the targeted implementation of the new prospective payment system.”