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DaVita Taps Malaysian Market

by Zacks Equity Research

December 05, 2012 | Comments : 0 Recommended this article: (0)

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Recently, DaVita Inc. ( DVA - Analyst Report ) announced the acquisition of Tulips Dialysis Centre – a hemodialysis center near Kuala Lumpur in Malaysia. Additionally, the company opened two dialysis centers in the greater Kuala Lumpur area as a joint venture with Seri Setia Group. The financial and other terms of the acquisition as well as the joint venture were not divulged.

Tulips Dialysis Centre is operating with 10 stations in Kota Damansara, which is situated 20 kilometers east of Kuala Lumpur. Meanwhile, the new centers have been opened in central Kuala Lumpur and Selangor with 19 and 6 stations, respectively.

DaVita is slowly expanding in international markets along with growing domestically through acquisitions and alliances. In the first nine months of 2012, DaVita acquired 71 dialysis centers, opened 48 centers and merged or sold 8 centers in the U.S., while 10 centers were acquired or opened outside the U.S.

DaVita has ventured into Saudi Arabia, China, India and Germany over the past two years. The company purchased a controlling interest in a Saudi Arabian kidney care company – Lehbi Care, announced a joint venture with 3SBio Inc. ( SSRX - Snapshot Report ) , a China-based biotechnology company and increased its stake in NephroLife, an India-based kidney care company, so far in 2012. Further, in November 2011, the company acquired ExtraCorp, a German company that owns two dialysis centers and manages two others.

Domestically, DaVita acquired ModernMed in January 2012 and DSI Renal Inc. in September 2011. Additionally, the company merged with HealthCare Partners in November 2012, which will support and augment its primary care and specialty physician services as well as hospital and other healthcare services.

DaVita seeks to expand its presence internationally and has been looking for acquisition and partnership opportunities in all major European and Asian countries. We expect that the company will involve itself in more meaningful mergers and acquisitions in the near future, given its strong international reputation that provides competitive advantage in terms of global acquisitions.

DaVita currently carries a Zacks #3 Rank (short-term Hold).

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