Fresenius Medical Care (FMS: 53.45 -1.41 -2.57%), a leading provider of dialysis products and services, is reportedly expanding its dialysis services business in Russia. The company has inked an agreement to acquire Kraevoy Nefrologicheskiy Center (KNC), a privately-held dialysis clinic operator in Russia’s Krasnodar region, located in the Black Sea. Fresenius did not disclose the financial terms of the deal.Currently, more than 20,000 patients undergo a regular and life-sustaining renal replacement therapy in Russia. Fresenius is the leading provider of dialysis products in Russia. The company operates dialysis services through its five dialysis clinics treating roughly 570 patients.
KNC operates five dialysis clinics in Krasnodar treating roughly 1,000 patients. It is the sole provider of dialysis services in the region. With more than 10% annual growth in patient population, Krasnodar is among the leading regions in Russia that boasts the highest demand for dialysis services.
The acquisition of KNC will enable Fresenius to address this strong demand and will further strengthen the company’s foothold in Russia’s growing dialysis services market by significantly expanding its clinic counts.
Fresenius expects the acquisition to bring in approximately $25 million in additional revenues annually and to be accretive to earnings in the first year following the closure of the deal. The company plans to increase the capacity of the KNC clinics upon closing the transaction.
Germany-based Fresenius is the world’s largest integrated provider of products and services for people undergoing dialysis due to chronic renal failure. The company has built a massive worldwide network of 2,580 dialysis clinics. DaVita Inc. (DVA: 61.10 -0.62 -1.00%) is Fresenius’ principal rival in the U.S.
Fresenius offers its dialysis services to roughly 10% of the patients globally and manufactures approximately 40% of the world’s dialysers and dialysis machines. Dialysis services account for roughly 75% of the company’s total sales.
Fresenius’ well diversified revenue streams, with around one-third of total sales generated outside the U.S, provide a hedge against any potential regulatory changes. The company expects revenues from its European markets to grow at a brisk rate, fuelled by a rising patient population and regional expansions.
No comments:
Post a Comment