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Fresenius Medical Care to acquire NxStage Medical for $2 billion.

Fresenius Medical Care, a provider of dialysis products and services, has signed an agreement to acquire NxStage Medical Inc., a U.S.-based medical technology and services company.

NxStage, which like Fresenius Medical Care North America, bases its headquarters in the Boston, Mass., area, was founded in 1998 and has approximately 3,400 employees. It develops, produces and markets a product portfolio of medical devices for use in home dialysis and in the critical care setting. In 2016, NxStage recorded $366 million in revenue.

Fresenius Medical Care intends to acquire all outstanding shares of NxStage through a merger for $30 per common share, valuing the transaction at approximately $2 billion. The merger, which has been approved by NxStage's Board of Directors, is subject to approval of NxStage stockholders, receipt of regulatory approvals, and other customary closing conditions. Fresenius Medical Care currently expects the closing to occur in 2018.

"The acquisition supports our 2020 strategic initiative of driving growth in the core business with innovation, better clinical outcomes through Care Coordination and improving the patient experience," said Rice Powell, chairman and CEO of Fresenius Medical Care. "Combining our two companies would strengthen and diversify our business in the U.S. and help meet the evolving needs of our patients."

The acquisition would enable Fresenius Medical Care to further leverage its manufacturing, supply chain and marketing competencies across the dialysis products, services, and care coordination businesses in a less labor- and capital-intensive care setting.

"The combination of Fresenius Medical Care's industry leadership with NxStage's products and employees has the potential to significantly advance the standard of care for patients around the world," said Jeff Burbank, founder and CEO of NxStage Medical Inc. "Fresenius Medical Care would like us to continue doing what we do best, and a lot more of it. I strongly believe our opportunities would be greater working together for the benefit of patients, customers, and shareholders."

"Home dialysis is a critical component of renal care, and this acquisition would help us accelerate growth and innovation in this important modality," said Bill Valle, CEO of Fresenius Medical Care North America. "I look forward to teaming up with Jeff Burbank and his team to transform the delivery of home dialysis care in the U.S."

The transaction would be cash and debt financed. An initial net cost synergies potential of approximately $80 to $100 million before tax over three to five years is expected. Integration cost of around $150 million in the first three years from the announcement are assumed. Fresenius Medical Care expects the acquisition to be accretive to net income and earnings per share within three years from closing.

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Title Annotation:TOP OF THE NEWS
Publication:Medical Product Outsourcing
Date:Sep 1, 2017
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