Fresenius Adds To Push in U.S. With Health Deal Fresnius Unit To Pay $2 Billion For Dialysis Firm Fresenius Unit To Pay $2 Bi...
August 08 2017 - 3:02AM
Dow Jones News
By Ben Dummett
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (August 8, 2017).
Fresenius SE & Co.'s minority-owned kidney dialysis business
agreed Monday to acquire NxStage Medical Inc. for about $2 billion
as part of the German health-care provider's broader push into the
U.S.
The NxStage deal comes less than five months after Fresenius SE,
which owns 31% of Fresenius Medical Care, agreed to acquire U.S.
generics drug manufacturer Akorn Inc. for $4.3 billion. That deal
aimed to bolster and diversify its Fresenius Kabi unit's focus on
sterile injectable medicines to treat critically and chronically
ill patients.
Fresenius Medical Care AG, which describes itself as the world
largest provider of dialysis products and services for the
treatment of kidney diseases, is acquiring NxStage as hospitals
face pressure to lower costs without undermining patient care. With
the acquisition of NxStage, Fresenius Medical gains access to the
Boston, Massachusetts-based company's portable dialysis machines,
for use in a patient's home as well as in hospitals, and dialysis
centers that both health care professionals and trained lay users
can operate.
Fresenius Medical says it treats 315,305 patients globally
through its networks of 3,690 dialysis clinics. The Bad Homburg,
Germany-based company is also a big provider of dialysis machines.
For Fresenius Medical, development of home therapies is a key
research and development focus. It is betting that rising
health-care costs and limited availability of trained personnel
will drive demand for NxStage's machines.
"Home dialysis is a critical component of renal care, and this
acquisition would help us accelerate growth and innovation" in this
area, said Bill Valle, head of Fresenius Medical's North American
operations. Fresenius Medical is acquiring NxStage for $30 a share,
about a 30% premium to the company's closing price in New York on
Friday.
For NxStage, the deals give its access to the resources of a
larger company. In 2016, Fresenius Medical generated revenue of
$17.9 billion, compared with $366 million for NxStage.
The NxStage deal underscores Fresenius SE's overall strategy of
targeting the U.S. as a source of revenue growth and cost savings
through acquisitions that complement its operations.
NxStage, like Fresenius Medical, has its U.S. headquarters in
Massachusetts.
Fresenius Medical estimates annualized net cost savings through
the deal of up to $100 million before tax over three to five years.
In the Fresenius Kabi-Akorn deal, the German company estimated
integration of the two businesses would generate about $100 million
in pretax cost savings a year.
-- William Wilkes contributed to this article.
Write to Ben Dummett at ben.dummett@wsj.com
(END) Dow Jones Newswires
August 08, 2017 02:47 ET (06:47 GMT)
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