The price increase for hospital services in Germany has been set at 2.50% for 2017. This is in line with the level of past years.

Construction has begun at the HELIOS hospital in Hildesheim, a city in the German state of Lower Saxony, on a fourth hospital block. The nearly 6,000-square-meter (65,000 square feet), three-story building will house wards for ear, nose and throat medicine, oral-facial, and thoracic surgery. A pulmonary clinic acquired in 2014, currently situated in nearby Diekholzen, will be relocated to the new building including a sleep lab twice as large as the existing one. HELIOS is investing about €13 million in the new block of wards. Completion is expected in 2018.

Following Fresenius’ announcement to acquire the largest Spanish hospital operator Quirónsalud, the rating agencies Standard & Poor’s (BBB-, stable), Moody’s (Baa3, stable) and Fitch (BBB-, stable) are affirming the corporate credit ratings of Fresenius.

• Adds 43 hospitals across Spain and sales of approximately €2.5 billion¹ to HELIOS’ leading German network
• Mutual best-practice transfer to further enhance quality patient care in both markets, creating a European leader in hospital management
• Substantial growth opportunities and cost synergies
• Highly accretive to Group earnings per share from 2017

Fresenius Helios acquires IDC Salud Holding S.L.U. (“Quirónsalud”), Spain’s largest private hospital operator, for a purchase price of €5.76 billion². Quirónsalud’s network is comprised of 43 hospitals, 39 outpatient centers and around 300 Occupational Risk Prevention (“ORP”) centers located in all economically important areas in Spain. The company has about 35,000 employees and offers the full spectrum of inpatient and outpatient care. Quirónsalud was created by the merger of IDC Salud (“IDC”) and Grupo Hospitalario Quirón (“GHQ”) in 2014.

¹2016 estimate²On a cash and debt-free basis

Quirónsalud has posted organic sales growth of more than 5% p.a. in recent years. Growth is driven by an above-market increase of patient admissions due to excellent quality of care combined with consistently short waiting times.

Quirónsalud is also a pioneer in public-private partnership (“PPP”) models, operating five hospitals (four in Madrid and one in Barcelona) that are integrated within the public healthcare network. Under the PPP agreements, Quirónsalud is assigned responsibility for the publicly insured inhabitants of certain coverage areas and receives remuneration based on capitation or activity performed.

Greenfield hospital projects and acquisitions have also contributed to Quirónsalud’s overall strong sales growth. Going forward, cross-selling between the recently acquired ORPs and Quirónsalud’s hospitals are expected to be yet another growth driver.

For 2016, Quirónsalud expects sales of approximately €2.5 billion and EBITDA of €460 to €480 million. In 2017, EBITDA is expected to be in the range of €520 to €550 million. The purchase price corresponds to approximately 10.8x at the mid-point of the 2017 EBITDA range.

Key drivers of the anticipated EBITDA growth are already implemented synergy projects related to the 2014 merger of IDC and GHQ, recent acquisitions, well-advanced efficiency projects as well as operating leverage. Neither greenfield projects, further acquisitions nor synergies with HELIOS are included in the 2017 projections. In the medium-term, the merger of HELIOS and Quirónsalud is expected to lead to incremental pre-tax synergies of approximately €50 million p.a. without meaningful implementation expenses.

Stephan Sturm, CEO of Fresenius, said: “This acquisition combines two leaders in terms of quality and size. Our patients will benefit from the exchange of knowledge and ideas. For Fresenius, this acquisition is another strategic step towards offering quality and yet affordable care for patients worldwide.”

Francesco De Meo, CEO of Fresenius Helios, said: “We are acquiring the largest private hospital operator in Spain, Europe’s number four. Quirónsalud has shown an impressive development and stands for best-in-class quality in patient care. Quirónsalud and HELIOS perfectly fit together as we can leverage on each other’s experience and knowledge. The new group will preserve both brands, Quirónsalud in Spain and Helios in Germany. I am particularly delighted that Víctor Madera will, beyond his ongoing role as CEO of Quirónsalud, play a very active role in our combined group. We aim to achieve the best for our patients in Germany and Spain, and, together with our Spanish partners, intend to leave a mark in the European health care system.”

Víctor Madera, founder and CEO of Quirónsalud, said: “I am extremely pleased to join such a splendid organization as HELIOS and very much look forward to a fruitful cooperation with Francesco De Meo. I am firmly convinced that HELIOS and Quirónsalud are ideal partners to achieve the best care for our patients in both Germany and Spain.”

Fresenius Helios acquires 100% of the share capital in Quirónsalud. Sellers are the private equity group CVC Capital Partners, Víctor Madera and other members of Quirónsalud’s management board.

Fresenius will issue 6,108,176 shares valued at €400 million to Víctor Madera who has agreed to a two year lock-up period. The balance of the purchase price will be debt-financed.

Group net debt/EBITDA will temporarily increase to approximately 3.1. Already in mid-2017, the leverage ratio is expected to return to the 2.5 to 3.0 target range.

The transaction is subject to regulatory approval by the relevant antitrust authorities and is expected to close in Q4/2016 or Q1/2017.

The transaction is expected to be highly accretive to Group net income¹ and EPS¹ already in 2017.

Given the expected meaningful accretion to Group sales and earnings, Fresenius will publish new mid-term targets as part of its full-year 2016 reporting.

¹Net income attributable to shareholders of Fresenius SE & Co. KGaA

 

Telephone Conference
A telephone conference concerning the acquisition of Quirónsalud will be held at 2.00 p.m. CEST on Tuesday, 6 September, 2016. All investors are cordially invited to follow the conference call in a live broadcast via the Internet at www.fresenius.com/events-and-presentations. Following the call, a replay will be available on our website.

• Adds 43 hospitals across Spain and sales of approximately €2.5 billion¹ to HELIOS’ leading German network
• Mutual best-practice transfer to further enhance quality patient care in both markets, creating a European leader in hospital management
• Substantial growth opportunities and cost synergies
• Highly accretive to Group earnings per share from 2017

 

Fresenius Helios acquires IDC Salud Holding S.L.U. (“Quirónsalud”), Spain’s largest private hospital operator, for a purchase price of €5.76 billion². Quirónsalud’s network is comprised of 43 hospitals, 39 outpatient centers and around 300 Occupational Risk Prevention (“ORP”) centers located in all economically important areas in Spain. The company has about 35,000 employees and offers the full spectrum of inpatient and outpatient care. Quirónsalud was created by the merger of IDC Salud (“IDC”) and Grupo Hospitalario Quirón (“GHQ”) in 2014.

Quirónsalud has posted organic sales growth of more than 5% p.a. in recent years. Growth is driven by an above-market increase of patient admissions due to excellent quality of care combined with consistently short waiting times.

Quirónsalud is also a pioneer in public-private partnership (“PPP”) models, operating five hospitals (four in Madrid and one in Barcelona) that are integrated within the public healthcare network. Under the PPP agreements, Quirónsalud is assigned responsibility for the publicly insured inhabitants of certain coverage areas and receives remuneration based on capitation or activity performed.

Greenfield hospital projects and acquisitions have also contributed to Quirónsalud’s overall strong sales growth. Going forward, cross-selling between the recently acquired ORPs and Quirónsalud’s hospitals are expected to be yet another growth driver.
For 2016, Quirónsalud expects sales of approximately €2.5 billion and EBITDA of €460 to €480 million. In 2017, EBITDA is expected to be in the range of €520 to €550 million. The purchase price corresponds to approximately 10.8x at the mid-point of the 2017 EBITDA range.

Key drivers of the anticipated EBITDA growth are already implemented synergy projects related to the 2014 merger of IDC and GHQ, recent acquisitions, well-advanced efficiency projects as well as operating leverage. Neither greenfield projects, further acquisitions nor synergies with HELIOS are included in the 2017 projections. In the medium-term, the merger of HELIOS and Quirónsalud is expected to lead to incremental pre-tax synergies of approximately €50 million p.a. without meaningful implementation expenses.

Stephan Sturm, CEO of Fresenius, said: “This acquisition combines two leaders in terms of quality and size. Our patients will benefit from the exchange of knowledge and ideas. For Fresenius, this acquisition is another strategic step towards offering quality and yet affordable care for patients worldwide.”

Francesco De Meo, CEO of Fresenius Helios, said: “We are acquiring the largest private hospital operator in Spain, Europe’s number four. Quirónsalud has shown an impressive development and stands for best-in-class quality in patient care. Quirónsalud and HELIOS perfectly fit together as we can leverage on each other’s experience and knowledge. The new group will preserve both brands, Quirónsalud in Spain and Helios in Germany. I am particularly delighted that Víctor Madera will, beyond his ongoing role as CEO of Quirónsalud, play a very active role in our combined group. We aim to achieve the best for our patients in Germany and Spain, and, together with our Spanish partners, intend to leave a mark in the European health care system.”

Víctor Madera, founder and CEO of Quirónsalud, said: “I am extremely pleased to join such a splendid organization as HELIOS and very much look forward to a fruitful cooperation with Francesco De Meo. I am firmly convinced that HELIOS and Quirónsalud are ideal partners to achieve the best care for our patients in both Germany and Spain.”

Fresenius Helios acquires 100% of the share capital in Quirónsalud. Sellers are the private equity group CVC Capital Partners, Víctor Madera and other members of Quirónsalud’s management board.

Fresenius will issue 6,108,176 shares valued at €400 million to Víctor Madera who has agreed to a two year lock-up period. The balance of the purchase price will be debt-financed.

Group net debt/EBITDA will temporarily increase to approximately 3.1. Already in mid-2017, the leverage ratio is expected to return to the 2.5 to 3.0 target range.

The transaction is subject to regulatory approval by the relevant antitrust authorities and is expected to close in Q4/2016 or Q1/2017.

The transaction is expected to be highly accretive to Group net income³ and EPS³ already in 2017.

Given the expected meaningful accretion to Group sales and earnings, Fresenius will publish new mid-term targets as part of its full-year 2016 reporting.

 

 

 
¹2016 estimate
²On a cash and debt-free basis
³Net income attributable to shareholders of Fresenius SE & Co. KGaA

 
Telephone Conference
A telephone conference concerning the acquisition of Quirónsalud will be held at 2.00 p.m. CEST on Tuesday, 6 September, 2016. You are cordially invited to follow the conference call in a live broadcast via the Internet. Following the call, a replay will be available on our website.

 

Fresenius Medical Care, the world’s largest provider of dialysis products and services, today announced to acquire 85% of equity interest in Indian dialysis group Sandor Nephro Services from a group of investors. The parties involved agreed not to disclose financial terms of the transaction.

Established in 2011, Sandor Nephro Services is India’s second largest dialysis care provider. Under the brand name “Sparsh Nephrocare” the company operates a network of more than 50 dialysis centers across the country. With the acquisition, Fresenius Medical Care will clearly strengthen its core business in one of the fastest growing economies of the world.

Sandor Nephro Services is expected to generate revenue of around $3 million in full year 2016. Fresenius Medical Care expects the investment to be accretive in 2017 on earnings after tax.

India’s economy is characterized by a rising middle class and a healthcare spending which grows at an average rate of 12% per year. According to estimates, within India’s population of around 1.3 billion people, there are about 1 million people suffering from chronic kidney disease. A major part of this patient base still has no sufficient access to dialysis treatments.

Rice Powell, Chief Executive Officer of Fresenius Medical Care, said: “With the acquisition of Sandor Nephro Services we will reach a new scale in the dialysis business in India. We have been in India for more than 15 years primarily with our product portfolio and we are now taking the next important step. This is a unique opportunity to become one of the major players in a market where we expect a strong growth in the overall economy and where we will help treating chronically ill dialysis patients.”

“We are very pleased to join the Fresenius Medical Care Group. After building up one of the most successful dialysis chains in India, we now have a strong partner on our side to further grow the business,” said Saurav Panda who co-founded Sparsh Nephrocare together with Gaurav Porwal. Both committed themselves to stay with the company for at least three years.

 

 

 

A consortium led by Vamed has handed over the first new building at the University Hospital in Kiel. The new unit took less than four months to build and will house a haematology-oncology ward. The building is part of a comprehensive construction and modernization project at the hospital. Completion is scheduled for 2019.

Fresenius Kabi is expanding its Melrose Park, Illinois site to significantly increase capacity for the production of injectable generic pharmaceuticals. The multi-stage expansion at the facility, just outside of Chicago, will include construction of a number of new buildings. Completion is scheduled for 2026, following an investment of nearly $250 million. www.fresenius-kabi.us