DaVita Inc.
(
DVA
) recently declared that it has purchased a controlling interest in
a Saudi Arabian kidney care company - Lehbi Care. All the three
hemodialysis clinics of Lehbi, which are situated in the Saudi
Arabian capital, Riyadh, will now be managed by DaVita.
Riyadh-based Lehbi currently has over 400 patients under its
care. These patients will be benefited by DaVita's plans to open a
vascular access center and expand home dialysis services.
The acquisition is an important step in DaVita's international
expansion strategy as Saudi Arabia has substantial demand for
dialysis services and offers strong growth opportunities in the
long term. The company has been rapidly expanding its international
operations recently through acquisitions and alliances.
DaVita announced in March 2012, a joint venture with
3SBio Inc.
(
SSRX
), a China-based biotechnology company. The companies will jointly
invest about $20 million in China, in the ratio of 7:3 (DaVita:
3SBio
). Additionally, the companies have also inked a supply deal for
anemia management drugs in China.
Earlier, in January 2012, DaVita announced the purchase of a
majority stake in NephroLife, an India-based kidney care company.
Prior to that, in November 2011, the company announced the
acquisition of ExtraCorp AG by its wholly-owned subsidiary, DV Care
GmbH. Alongside, DaVita operates a dialysis center in Singapore and
has also signed an agreement to develop and operate various clinics
in Malaysia.
Of late, DaVita has been looking for suitable global acquisition
and partnership opportunities, primarily in Europe and Asia. We
expect more meaningful mergers and acquisitions, given the
company's strong international reputation, which provides
competitive advantage in terms of global acquisitions.
The Zacks Consensus Estimate for DaVita's first-quarter 2012
earnings is currently pegged at $1.45 per share, up by an estimated
51% year over year. None of the 12 analysts covering the stock
revised their estimates in the last 30 days. For 2012,
earnings are expected to be $6.23 per share, showing a forecasted
21% climb over 2011.
DaVita currently carries a Zacks #3 Rank, implying a short-term
'Hold' rating. Additionally, we maintain a long-term 'Neutral'
recommendation on the company.
DAVITA INC (
DVA
): Free Stock Analysis Report
3SBIO INC-ADS (
SSRX
): Free Stock Analysis Report
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