Fresenius Medical Care AG & Co. (ADR) (NYSE:FMS) has announced its acquisition of NxStage Medical, Inc. (NASDAQ:NXTM) in a deal reportedly valued at $2 billion.
The acquisition was carried out by Fresenius’ kidney dialysis business which struck the deal on Monday to buy NxStage Medical for $2 billion. The acquisition is the company’s move towards growing its presence in the US market. It also comes just a few months after Fresenius SE, the parent company of Fresenius Medical Care entered a deal to buy out Akorn, Inc. (NASDAQ:AKRX), a U.S drug maker, for $4.3 million. This deal was particularly aimed at diversifying and boosting the focus of Fresenius’ Kabi unit on the use of sterile injectable medicines to treat patients suffering from chronic illnesses.
Fresenius is currently the largest provider of dialysis products and services in the world. The recent deal is reportedly going to involve the purchase of NxStage at $30 per share at a 30% premium. NxStage is popular for its solutions for conditions such as acute kidney failure. The company makes medical devices that allow patients to undergo dialysis at the convenience of their homes. The company managed to secure $366 million in revenue in 2016.
“Home dialysis is a critical component of renal care, and this acquisition would help us accelerate growth and innovation,” stated Bill Valle, Fresenius head of operations in North America.
Rice Powell, CEO of Fresenius stated that the new acquisition will be significant towards supporting his company’s growth especially in core business over the next three years. He stated that the joint efforts and resources from the two companies will diversify and strengthen the joint company’s position in the US. Powell also stated that the acquisition will also play a key role towards meeting the constantly evolving needs of the patients. The acquisition is expected to come to a close in 2018 and is awaiting approval from NxStage shareholders as well as regulatory bodies.
Fresenius stock closed the latest trading session on Monday at $46.14 after a 0.67 percent drop compared to the value of the stock during the previous close.