Germany's Fresenius Medical Care, which offers products and services for individuals undergoing dialysis as a result of chronic kidney failure, has agreed to buy two U.S.-based dialysis companies for a combined total of about $2 billion.
The company announced Tuesday it had executed a merger agreement with Liberty Dialysis Holdings in a deal worth approximately $1.7 billion. The merger is subject to regulatory approval and is expected to close early next year. Liberty Dialysis has annual sales of roughly $1 billion and operates approximately 260 dialysis clinics.
"I have found Liberty's physician partners to be a thoughtful, energetic and involved group of physicians," said Frank Maddux, chief medical information officer of Fresenius. "They have worked in a collaborative process to tackle industry challenges ranging from the Conditions for Coverage, to the Bundle and the QIP. One example of this team's success is the fact that Liberty has achieved the lowest catheter rates in the industry, which clearly contributes to their favorable outcomes for patients and yields lower overall cost for the health system."
Liberty Dialysis Holdings was created last year through the merger of Cool Springs, TN-based Renal Advantage and a Washington firm. Fresenius invested $300 million in Renal Advantage earlier this year, as the Nashville Post notes.
Fresenius also announced it will buy American Access Care Holdings for $385 million. AAC operates 28 freestanding out-patient centers serving the vascular access needs of dialysis patients. The company expects the deal to close during the fourth quarter.
"There will be no job cuts associated with the divestitures of facilities as we are growing at about 5% per year." Fresenius Medical Care North America spokeswoman Jane Kramer said, according to Mass High Tech. She said Fresenius has 45,000 workers in the U.S. and will add an additional 5,300 employees from the acquired companies.
Fresenius has been on a hiring crusade recently. As it notes in its release, the company had 77,081 employees (full-time equivalents) worldwide versus 73,452 employees at the end of last year. It credits overall growth in the company's business and acquisitions as contributors to this increase.
Under a new U.S. Medicare reimbursement system, bigger dialysis chains will have an advantage, Sanford C. Bernstein's Lisa Clive said in a phone interview with Bloomberg. The new system is a fixed compensation amount designed to reduce overuse of drugs that were previously separately billable. She adds Fresenius' deals make strategic sense.