By Neetha Mahadevan
FRANKFURT--Fresenius Medical Care AG & Co. KGaA (FMS) said
Friday it will be become a majority shareholder in Sound Inpatient
Physicians Inc after investing $600 million in U.S-based healthcare
service provider, as part of a recapitalization of Sound.
"This investment in Sound's inpatient expertise is a significant
step forward in our care coordination strategy," Chief Executive
Ron Kuerbitz said in a statement.
Earlier this week, the Wall Street Journal reported that
TowerBrook Capital Partners will sell a majority stake in Sound
Inpatient to the German dialysis provider, after which TowerBrook
and Sound's management will retain minority interests in the
company.
Upon completion, the deal will allow TowerBrook to exit part of
its investment in Sound. The firm initially invested in the
business in 2005, providing additional equity about two years
later.
Fresenius Medical expects Sound Inpatient Physicians to generate
about $500 million in revenue in the next 12 months and expects the
investment to be accretive to operating earnings within the first
year after closing.
It will fund the investment through available cash and credit
facilities, supplemented by additional debt financing, the company
said.
Earlier this year, Fresenius Medical said it will invest in care
coordination around dialysis. Care coordination is an extension of
the company's renal care for its patients. It expects revenue from
care coordination to grow about 18% by 2020 from 3% in 2013.
The transaction, which is subject to customary closing
conditions, is expected to close within the next 10 days.
Write to Neetha Mahadevan at Neetha.mahadevan@wsj.com
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