DaVita Inc. (NYSE: DVA), a provider of dialysis services in the U.S. for patients suffering from chronic kidney failure, today entered into a definitive merger agreement with HealthCare Partners, which is the U.S.’ largest operator of medical groups and physician networks.
DVA shares have risen sharply following the announcement of the merger agreement. The stock rose to an intra-day high of $85.95, and at last check, it was up 4.71% to $84.62 on above average volume of 4.80 million.
Under the terms of the agreement, DaVita will pay HealthCare Partners $4.42 billion in cash and stock. On completion of the transaction, the combined company will be called DaVita HealthCare Partners Inc. The transaction is expected to be completed in the fourth quarter of 2012.
DaVita expects to finance the cash portion of the transaction through a combination of available cash, additional borrowings under its existing senior secured credit facilities and additional debt financing.
HealthCare Partners, which has leading operations in Southern California, Central Florida, and Southern Nevada areas, had reported 2011 revenue of approximately $2.4 billion. The company’s total care dollars under management were approximately $3.3 billion in 2011.
Kent Thiry, Chairman and CEO of DaVita, said that DVA believes the combined enterprise will offer new and exciting levels of clinical quality, service, and consumer/taxpayer savings. Thiry further said that DVA currently executes on its integrated care mission with thousands of physician partners across the country for specialized kidney care services and HealthCare Partners executes on that same mission across a full and deep array of healthcare services in three geographic markets. Thiry added that the combination will create a unique patient-and physician-focused organization.
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