) announced that it will offer $1 billion worth of senior notes due
2022, in order to make part payment for its $4.42 billion
acquisition of HealthCare Partners. The company will finance the
remaining part of the purchase consideration from borrowings made
under its amended senior secured credit facility and cash
Further, DaVita will use the residual portion of the borrowing
under the amended senior secured credit facility and cash balance
to pay off a $198.5 million Term Loan A-2 outstanding under the
existing senior secured credit agreement. The amount will be
further used to repay HealthCare Partners' existing indebtedness
and to pay the fees and expenses associated with the
Moreover, in case the acquisition is not completed by the end of
November 2012 or the merger agreement is terminated prior to the
closure, DaVita will redeem all the senior notes. However, the
company retains the right to extend the date of completion of the
acquisition under certain situations.
DaVita announced the agreement to purchase HealthCare Partners,
one of the largest operators of medical groups and physician
networks in the U.S., in May 2012. The transaction amount comprises
$3.66 billion in cash and about 9.38 million shares of DaVita.
Moreover, the shareholders of HealthCare Partners will get an
additional $275 million if the company achieves certain performance
targets in 2012 and 2013.
Post acquisition, the merged company will operate under the name
DaVita HealthCare Partners Inc., although HealthCare Partners will
operate as a subsidiary of the umbrella company. The
acquisition is expected to be completed in the fourth quarter of
2012, subject to approval of the regulatory authorities and owners
of HealthCare Partners, apart form other customary closing
JPMorgan Chase & Co.
) acted as DaVita's financial advisor for the deal.
HealthCare Partners operates primarily in the Southern
California, Central Florida and Southern Nevada regions. The
company provides primary care and specialty physician services as
well as hospital and other healthcare services.
DaVita frequently acquires companies both domestically as well
as internationally in order to expand its business. However,
recently the company has been focusing more on international
In April 2012, DaVita announced the purchase of a controlling
interest in a Saudi Arabian kidney care company - Lehbi Care.
Earlier, in March 2012, the company announced a joint venture with
), a China-based biotechnology company, to jointly invest about $20
million in China.
DaVita currently caries a Zacks #3 Rank, implying a short-term
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