DaVita Collaborates with 3SBio - Analyst Blog
March 09 2012 - 12:32PM
Zacks
In order to offer dialysis services in northeastern China,
DaVita Inc. (DVA) announced a joint venture with
3SBio Inc. (SSRX), a China-based biotechnology
company. The companies will jointly invest about $20 million in
China, in the ratio of 7:3 (DaVita:3SBio). Additionally, the two
companies have also inked a supply deal for anemia management drugs
in China.
3SBio is a leading developer of biopharmaceutical products in
China. The company also manufactures and markets biopharmaceuticals
and conducts research in various medical fields such as nephrology,
oncology, supportive cancer care and infectious diseases.
The agreement is a significant step in DaVita’s international
expansion strategy as the Chinese market provides ample scope for
growth. Moreover, the company will gain from 3SBio’s widespread
marketing network in China.
DaVita regularly acquires companies both domestically as well as
internationally in order to expand its business. However, recently
the company has been more inclined toward international
expansion.
In January 2012, DaVita announced the purchase of a majority
stake in NephroLife, an India-based kidney care company.
Previously, in November 2011, the company announced the acquisition
of ExtraCorp AG by its wholly-owned subsidiary DV Care GmbH.
Alongside, DaVita operates a dialysis center in Singapore and has
also signed an agreement to develop and operate various clinics in
Malaysia.
DaVita is mainly focusing its international expansion strategy
on Europe and Asia and has been looking for suitable acquisition
and partnership opportunities. We expect more meaningful mergers
and acquisitions, given the company’s strong international
reputation, which provides competitive advantage in terms of global
acquisitions.
The Zacks Consensus Estimate for DaVita’s first-quarter earnings
is currently pegged at $1.45 per share, up about 51% year over
year. Five of the 13 analysts covering the stock revised their
estimates upward in the last 30 days, while five downward revisions
were witnessed. For 2012, earnings are expected to be about
$6.24 per share, climbing nearly 21% over 2011.
DaVita currently caries a Zacks #3 Rank, implying a short-term
Hold rating.
DAVITA INC (DVA): Free Stock Analysis Report
3SBIO INC-ADS (SSRX): Free Stock Analysis Report
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