The $30-per-share deal, which is expected to close this year, represents a 29.6% premium on the August 4 closing price of $23.14 for NXTM shares. The stock was up 25.5% to $29.04 today in pre-market trading. FRE shares were down -1.2% to €69.14 apiece today in Frankfurt.
Fresenius said it plans to fund the deal with cash and debt and expects Lawrence, Mass.-based NxStage to add to net income and earnings per share within three years of the deal’s close.
“The acquisition supports our 2020 strategic initiative of driving growth in the core business with innovation, better clinical outcomes through care coordination and improving the patient experience,” chairman & CEO Rice Powell said in prepared remarks. “Combining our two companies would strengthen and diversify our business in the U.S. and help meet the evolving needs of our patients.”
“The combination of Fresenius Medical Care’s industry leadership with NxStage’s innovative products and employees has the potential to significantly advance the standard of care for patients around the world,” added NxSyage founder & CEO Jeff Burbank. “Fresenius Medical Care would like us to continue doing what we do best, and a lot more of it. I strongly believe our opportunities would be greater working together for the benefit of patients, customers and shareholders.”
“Home dialysis is a critical component of renal care, and this acquisition would help us accelerate growth and innovation in this important modality,” Fresenius Medical Care North America CEO Bill Valle said. “I look forward to teaming up with Jeff Burbank and his highly talented team to transform the delivery of home dialysis care in the U.S.”
Analysts at Bernstein said the deal came as a surprise but made good strategic sense in the medium term.
“Currently HHD (home dialysis) is a niche treatment as under current reimbursement it is an expensive modality. However, with reimbursement increasingly moving towards an integrated care model … the flexibility of being able to treat patients at home is likely to be more attractive,” they said.
Material from Reuters was used in this report.