14 August 2017

FMC to purchase NxStage

Germany’s Fresenius Medical Care (FMC) is expanding in the US by acquiring medical devices maker NxStage in a cash deal worth about USD 2,000 million. The purchaser is offering to pay USD 30 per share, representing a 30 per cent premium over the target’s close of USD 23 on 4th August 2017, the last trading day prior to the deal being announced. Adams Street Partners, a private equity firm invested in NxStage, will make a full exit if the transaction goes through.

According to Zephyr, the M&A database published by Bureau van Dijk, this is FMC’s largest announced acquisition on record. The transaction, which is scheduled to complete next year, has been approved by the boards of both companies, although it remains subject to the green light from regulators and shareholders.

Listed on Nasdaq and headquartered in Lawrence, Massachusetts, NxStage is a developer and manufacturer of kidney dialysis equipment designed to treat end-stage renal disease and acute kidney failure. Founded in 1998, the company has a presence in more than 21 countries and employs about 3,400 people at locations including manufacturing facilities in Germany, Mexico and Italy.

NxStage’s flagship product NxStage System One is a portable hemodialysis device which allows patients to undergo treatment conveniently in their own homes or elsewhere when they are on vacation. The company also operates a small number of dialysis clinics where kidney patients can be treated directly. It posted revenue of USD 366.38 million in the 12 months ended 31st December 2016, up 9.0 per cent on the USD 336.12 million recorded in the previous year. Net loss for the period totalled USD 7.32 million, compared to net loss of USD 16.26 million in 2015.

Frankfurt and New York-listed FMC is billed as the world’s largest provider of treatment products and services for patients with renal diseases. It currently operates over 3,600 dialysis clinics and treats more than 300,000 people worldwide.

Commenting on the transaction, FMC’s chairman and chief executive Rice Powell said: “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.” He added: “Combining our two companies would strengthen and diversify our business in the US and help meet the evolving needs of our patients.”

As shown by Zephyr, FMC has announced or completed several other deals within the healthcare sector in the past year. It is currently in the process of acquiring 70 per cent of Cura Day Hospitals for up to AUD 315 million (USD 248 million) and, as reported by the Australian Financial Review, is also looking to take over the remaining 30 per cent of the Brisbane-based surgical hospital operator. Last September, FMC successfully purchased 85 per cent of Indian dialysis centre Sandor Nephro Services and also snapped up a Kunming, China-based hospital just a few months ago.

 © Zephyr