Fresenius Buys Asia Renal Care

Fresenius Medical Care (FMS - Snapshot Report) recently undertook a major expansion in dialysis services in the Asia-Pacific region by signing a sales and purchase agreement to acquire Asia Renal Care, a wholly owned subsidiary of Bumrungrad International, an associate company of Bumrungrad Hospital. 

If approved by the regulatory authorities in Taiwan and Singapore, the deal will add about $80 million to Fresenius Medical’s annual revenues. The transaction is expected to be accretive to earnings in the first year of operations. 

The markets for dialysis care in the Asia-Pacific region are expected to experience strong growth in the next five years with the number of patients slated to increase to more than 1 million from the current 680,000. Fresenius Medical is the dominant player followed by Asia Renal Care, which operates more than 100 clinics and treats approximately 6,200 patients. It has operations in Japan, Korea, Malaysia, Philippines, Singapore, Taiwan and Thailand. 

Fresenius Medical is the world's largest integrated provider of products and services for individuals undergoing dialysis due to chronic kidney failure, a condition that affects more than 1.89 million individuals worldwide. The company has built a world-wide network of 2,580 dialysis clinics and provides dialysis treatment to 198,774 patients. It is also the world's leading provider of dialysis products. 

Fresenius Medical reported net revenues of $2.88 billion in the first quarter 2010, up 13% year over year. First quarter earnings per share increased 6% to $0.70. In the US market, DaVita (DVA - Analyst Report) is a major competitor. 

We have a Neutral rating on Fresenius Medical Care.

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