Fresenius Buying Euromedic's Unit - Analyst Blog

Fresenius Medical Care (FMS), the largest global player in dialysis-related services, recently signed a purchase agreement to acquire International Dialysis Centers (“IDC”), Euromedic International's (“Euromedic”) dialysis service segment. For its part, Euromedic will focus on cancer treatment and diagnostic arenas.

With this acquisition, Fresenius is expanding its role in the dialysis care business, mainly in Eastern Europe, where IDC has a major presence. IDC provides treatment to over 8,200 hemodialysis patients mainly in Central and Eastern Europe and runs 70 clinics in nine nations. The deal is subject to regulatory approvals by anti-trust authorities. It is expected to close in the first half of 2011.

Upon fruition, the newly purchased business will contribute about $180 million in annual revenues for Fresenius. Moreover, this deal is expected to be accretive to earnings in the very first year following the transaction closure. The purchase consideration will be €485 million ($648 million). Fresenius will initially finance the purchase with its cash flow from operations combined with available borrowing capacity. Later, the company plans to refinance the acquisition on a long-term basis.

Fresenius operates a network of about 2,716 dialysis clinics across North America and overseas markets to provide dialysis treatment to over 210,000 patients worldwide. Dialysis treatment is required by victims of chronic kidney failure, a condition that affects over 1.89 million people the world over each year.

Fresenius is also the world's largest provider of dialysis products. The company's primary competitor in the U.S. is DaVita (DVA), which provides dialysis services for patients suffering from chronic kidney failure or end stage renal disease (“ESRD”).

 
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