Earlier this week,
HealthCare Partners Inc.
) announced the acquisition of 9 dialysis centers from rival
Fresenius Medical Care AG & Co. KGAA
). Of these, 5 are situated in Portugal, while the remaining 4
are in Poland.
The acquisition is a part of DaVita's efforts to expand its
presence in Europe. Since 2011, the company is slowly expanding
in the international markets with the primary focus on Europe and
Asia. The company has entered Singapore, Malaysia, Saudi Arabia,
China, India and Germany in the past two years through
acquisitions and alliances.
In addition, DaVita also announced a service agreement with
Fresenius during the week. Under the agreement, the kidney care
division of DaVita will provide DaVita Rx prescription drug
services to the Medicare patients of Fresenius in the U.S. The
agreement will be implemented in the second half of 2013.
The agreement will help Fresenius meet the regulatory
requirement of including all oral end stage renal disease
medications in the bundled payment system from 2016. The company
will use DaVita Rx's state-of-the-art pharmacy supply oral
medicines to its Medicare beneficiaries. The agreement is
expected to boost the earnings of DaVita's ancillary services and
strategic initiatives segment, which covers its pharmacy
Concurrently, DaVita also announced the extension of its
vendor relationship with Fresenius. The company has been
purchasing dialysis supplies such as hemodialysis machines and
disposable products from Fresenius for a long time.
DaVita currently carries a Zacks Rank #2 (Buy), while
Fresenius carries a Zacks Rank #3 (Hold). We maintain a long-term
Outperform recommendation on DaVita.
DAVITA INC (DVA): Free Stock Analysis Report
FRESENIUS MED (FMS): Free Stock Analysis
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