Quirónsalud, the Spanish hospital group that is part of Fresenius Helios, has acquired Clínica Medellín and entered the attractive private hospital market in Colombia. Clínica Medellín operates two centrally located hospitals in Medellín, a major city of 2.5 million people. The two facilities have a total of about 185 beds. The total investment for Clínica Medellín is more than €50 million. Following Quirónsalud's entry into Peru last year, this is another step in strengthening the company’s presence in Latin America’s growing and consolidating hospital markets. Fresenius Helios expects the transaction to close in Q1 2019, pending anti-trust and regulatory clearance.

Fresenius is reorganizing the Group’s inpatient rehabilitation business, to create the conditions for the continued growth of Fresenius Helios and Fresenius Vamed. On July 1, 2018, 38 health care facilities and 13 service companies in Germany specializing in inpatient post-acute and nursing care, which are now operated by Fresenius Helios, will be transferred to Fresenius Vamed. This will strengthen Fresenius Vamed’s position as a leading provider of post-acute care in Europe. Fresenius Helios, meanwhile, will focus even more strongly on the acute care hospital business and its continued internationalization.

The transaction has a total volume of €485 million, including assumed net debt of €15 million. It will be financed Group-internally. This year, the inpatient post-acute care business that is being transferred is expected to generate about €460 million in sales and an EBIT of around €37 million.

As part of the transfer, Fresenius Vamed is taking on all of the approximately 7,700 employees of the post-acute care business.

With regard to the respective core competencies of Fresenius Vamed and Fresenius Helios, the two Fresenius business segments will further intensify their cooperation, which has already proven successful in Germany and Spain.

Stephan Sturm, CEO of Fresenius, said: “For Fresenius, post-acute care is and will remain an important component of the treatment we provide to our patients. And now by bundling our great expertise in this area within Fresenius Vamed, we are building a platform for further international growth. We are also putting Fresenius Helios’ on a stronger growth footing, with an even clearer focus on acute care. In addition, we are facilitating even more intensive cooperation between these two business segments, for the benefit of our patients.”

Fresenius Vamed is already a leading post-acute care provider in Austria, Switzerland and the Czech Republic, and entered the British market last year. After the transaction, Fresenius Vamed will have a total of 63 inpatient health care facilities in five European countries.

Even after the transfer of its inpatient post-acute care business to Fresenius Vamed, Fresenius Helios will remain Europe’s largest private hospital operator, with 137 hospitals and about 100,000 employees in Germany and Spain. The strategic focus of Fresenius Helios will remain its acute care hospitals, as well as the outpatient acute care - including preventative medicine - and outpatient post-acute care.

As a consequence of the transfer, Fresenius is adjusting the 2018 outlook for Fresenius Helios and Fresenius Vamed. Fresenius Helios now expects EBIT growth of 5% to 8% (7% to 10% previously). Its organic sales growth outlook of 3% to 6% remains unchanged. Fresenius Vamed is now expecting EBIT growth of 32% to 37%¹ (5% to 10% previously). Fresenius Vamed’s organic sales growth forecast remains unchanged at 5% to 10%.

The transaction will not significantly affect the 2018 business results of the Fresenius Group, which accordingly confirms its guidance² for the current business year. Group sales are expected to increase by 5% to 8%³ in constant currency. Net income^4,5 is expected to grow by 6% to 9% in constant currency. Excluding expenditures for the further development of the biosimilars business, net income^4,6 is expected to grow by ~10% to 13% in constant currency.

 ¹ Expected EBIT of the inpatient post-acute care business in H2/2018: ~€20 million ² Excluding effects of the Akorn, NxStage and Sound Physicians transactions ³ 2017 base adjusted for IFRS 15 adoption (deduction of €486 million at Fresenius Medical Care) ⁴ Net income attributable to shareholders of Fresenius SE & Co. KGaA ⁵ 2017 base: €1,816 million; 2018 before special items (i.e., transaction-related effects); including expenditures for further development of biosimilars business (€43 million after tax in FY/17 and ~€120 million after tax in FY/18) ⁶ 2017 base: €1,859 million; 2018 before special items (i.e., transaction-related effects)

Fresenius has decided today to terminate the company’s merger agreement with Akorn, due to Akorn’s failure to fulfill several closing conditions.

Fresenius’ decision is based on, among other factors, material breaches of FDA¹ data integrity requirements relating to Akorn’s operations found during Fresenius’ independent investigation. Fresenius offered to delay its decision in order to allow Akorn additional opportunity to complete its own investigation and present any information it wished Fresenius to consider, but Akorn has declined that offer.

Fresenius confirms its guidance for 2018. The Group continues to expect a sales growth of 5% to 8%² in constant currency. Group net income³ is expected to increase by 6% to 9%⁴ in constant currency (excluding expenditures for the further development of the biosimilars business around 10% to 13%⁵).

On Saturday, Fresenius Medical Care announced the sale of Sound Inpatient Physicians Holdings, LLC. The expected pre-tax book gain of around EUR800 million on this transaction is excluded from Fresenius’ 2018 Group guidance.
Fresenius will report its first-quarter results, as scheduled, on May 3, 2018.

¹ FDA: Food and Drug Administration ² 2017 adjusted for IFRS 15 (EUR486 million at Fresenius Medical Care) ³ Net income attributable to shareholders of Fresenius SE & Co. KGa⁴ Base 2017: EUR1,816 million; 2018 before special items (acquisition-related expenses); including expenditures for further development of biosimilars business (EUR43 million after tax in FY/17 and ~EUR120 million after tax in FY/18) ⁵ Base 2017: EUR1,859 million; 2018 before special items (acquisition-related expenses); excluding expenditures for further development of biosimilars business (EUR43 million after tax in FY/17 and ~EUR120 million after tax in FY/18)

# # #

For additional information on the performance indicators used please refer to our website www.fresenius.com/alternative-performance-measures.

Fresenius Vamed has opened the Institute for Gender Medicine in cooperation with the Medical University of Vienna. This new research institute, in the Lower Austria town of Gars am Kamp, will focus on the different needs of female and male patients, for example in the interpretation of disease symptoms. Fresenius Vamed will be able to use the institute’s research findings to develop tailored treatment offerings in areas such as prevention and rehabilitation. The Institute for Gender Medicine complements initiatives for individualized medical care already being carried out by the VAMED International Medical Board and its approximately 650 physicians.

Fresenius Kabi has successfully closed the acquisition of Merck KGaA’s biosimilars business. The transaction comprises the entire development pipeline of Merck’s biosimilars and an experienced team of employees located in Aubonne and Vevey, Switzerland. The product pipeline has a focus on oncology and autoimmune diseases, and addresses a market with current annual branded sales of around US$30bn. The biosimilars business will be consolidated as of September 1, 2017.

The purchase price of €656 million will be mainly cash flow financed. Thereof, €156 million have been paid upon closing. Up to €500 million are milestone payments strictly tied to achievements of development targets in the coming years. The slight reduction in purchase price is related to phasing of R&D expenditures between signing and closing of the acquisition. These are now expected to amount to around €60 million from closing until year-end 2017. All clinical studies for the product pipeline are on track.

The transaction is estimated to be EBITDA break-even in 2022. From 2023 onwards, the acquisition is expected to be significantly accretive to Group net income¹ and Group EPS¹.

The relevant antitrust authorities have approved the transaction without imposing conditions.

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

At yesterday’s Special Meeting, the shareholders of Akorn, Inc., have approved the merger agreement with Fresenius Kabi, with 83.9% of outstanding shares being voted in favour of the transaction. This corresponds to 99.7% of common shares represented in person or by proxy at the Special Meeting. The approval of the merger agreement fulfills one important condition for the full acquisition of Akorn, Inc. The transaction remains subject to additional customary closing conditions, including regulatory review under the Hart-Scott-Rodino Antitrust Improvements Act in the U.S.

On April 24, 2017, Fresenius Kabi announced it would acquire Akorn, Inc., a U.S.-based manufacturer and marketer of prescription and over-the-counter pharmaceutical products, for US$34 per share, equivalent to a total acquisition price US$4.3 billion, plus approximately US$450 million¹ of net debt.

For additional information on the performance indicators used please refer to our website https://www.fresenius.com/alternative-performance-measures.

For information regarding non-GAAP financial measures or adjusted figures derived from Akorn’s public information, please see section “Non-GAAP Financial Measures” on Akorn’s FY/16 press release using following link: http://investors.akorn.com/phoenix.zhtml?c=78132&p=irol-newsArticle&ID=2250528

¹ Fresenius projection for December 31, 2017

• Transactions provide access to attractive pharmaceutical growth markets
• Acquisition of Akorn, Inc. expected to be accretive to Group earnings¹ in 2018
• Acquisition of Merck KGaA’s biosimilars business creates excellent position in a fast-growing market
• Both transactions fully debt and cash flow financed
• 2020 Group earnings target² confirmed

^{1 Net income attributable to shareholders of Fresenius SE & Co. KGaA, before integration costs
2 Net income attributable to shareholders of Fresenius SE & Co. KGaA}

Stephan Sturm, CEO of Fresenius, said: “From a position of strength, Fresenius Kabi enhances and complements its business with two major steps. Akorn is an excellent strategic fit for Fresenius Kabi. The company’s product portfolio is highly complementary to our well-developed generics business. The simultaneous entry into the biosimilars business is the right step into the right direction at the right time. The acquired biosimilars assets are an attractive opportunity for Fresenius Kabi to enter this strongly growing and highly profitable segment. Both acquisitions are milestones on Fresenius Kabi’s growth path for this decade and beyond.”

Acquisition of Akorn to strengthen and diversify core business and product portfolio

• Purchase price of US$34 per share equivalent to US$4.3 billion, plus approximately US$450¹ million of Akorn net debt
• Akorn’s board recommends approval of transaction and merger agreement
• Substantial cost and growth synergies paired with limited integration complexity

Fresenius Kabi has agreed to acquire Akorn, Inc., a U.S.-based manufacturer and marketer of prescription and over-the-counter pharmaceutical products, for US$34 per share equivalent to US$4.3 billion, plus approximately US$450 million¹ of net debt.

Akorn produces and markets a diverse product portfolio of injectables, topical creams, ointments and gels, sterile ophthalmics, as well as oral liquids, otic solutions (for the ear), nasal sprays and respiratory drugs. Akorn products are sold in retail pharmacies (prescription and over-the-counter) and directly to physicians, in addition to hospitals and clinics – almost exclusively in the U.S.

Akorn participates in a total U.S. market of approximately US$106 billion. Akorn’s current product pipeline of pending ANDAs (Abbreviated New Drug Approvals) has a total addressable IMS market value of US$9.3 billion. The company employs more than 2,000 people and has three R&D centers and five manufacturing facilities in the United States, Switzerland and India. The U.S. headquarters for Akorn and Fresenius Kabi are both in Northern Illinois, located in close proximity.

Akorn announced today that based on a preliminary review of Q1/17 results, it is reaffirming its previously announced 2017 guidance (including revenue of US$1,010 to 1,060 million and adjusted EBITDA² of US$363 to 401 million), excluding any one-time costs related to the transaction with Fresenius Kabi. The total purchase price corresponds to approximately 12.4x adjusted EBITDA² at the mid-point of the expected 2017 range. Assuming the transaction closes at the end of 2017, Fresenius Kabi projects 2018 sales from this business of US$1,035 to 1,085 million, and EBITDA³ of approximately US$380 to 420 million.

“Bringing together our two companies and product portfolios will strengthen and diversify our business in the U.S.,” said Mats Henriksson, CEO of Fresenius Kabi. “Akorn brings to Fresenius Kabi specialized expertise in development, manufacturing and marketing of dosage forms currently not available in our portfolio, as well as access to new customer segments and products. Akorn’s pipeline is impressive, with approximately 85 ANDAs filed and pending with the FDA and dozens more in development.”

Mid-term, the acquisition is expected to create cost and growth synergies of approximately US$100 million p.a. before tax. Fresenius Kabi expects a progressive ramp-up of those synergies which will be achieved by integrating and modernizing Akorn’s production network and by combining other functions. For the period from 2018 to 2022, Fresenius Kabi expects integration costs of approximately US$140 million before tax in total. The integration costs are projected to be frontloaded with the major impact in 2018.

Fresenius expects the acquisition to be accretive to Group net income⁴ and Group EPS⁴ in 2018, excluding integration costs, and to contribute positively from 2019 onwards including integration costs.

Akorn’s board recommends the approval of the transaction and merger agreement with Fresenius Kabi to its shareholders. Akorn’s largest shareholder, who beneficially controls approximately 25% of its shares, has committed to supporting the transaction. The transaction is subject to customary closing conditions, including regulatory review under the Hart-Scott-Rodino Antitrust Improvements Act in the U.S. and approval by Akorn shareholders. Closing is expected by early 2018.

The purchase price will be financed by a broad mix of Euro and US-Dollar denominated debt instruments.

^{1 Based on projected net debt of US$450 million as of December 31, 2017
2 For a definition of Akorn’s adjusted EBITDA please refer to Akorn’s FY/16 press release as of 1 March 2017
3 Before integration costs
4 Net income attributable to shareholders of Fresenius SE & Co. KGaA}


Entry into growing biosimilars market

• Strategic addition to Fresenius Kabi’s existing drug portfolio
• Attractive product pipeline with a focus on oncology and autoimmune diseases with current branded sales of around US$30bn
• Investment ceiling of up to €1.4 billion until 2022, strictly tied to achievements of development targets

Fresenius and Merck KGaA announced today that Fresenius Kabi will acquire Merck’s biosimilars business, which comprises the entire development pipeline and an experienced team of more than 70 employees located in Aubonne and Vevey, Switzerland. The product pipeline has a focus on oncology and autoimmune diseases with current branded sales of around US$30bn.

A biosimilar is a drug that is “similar” to another biologic drug already approved. Biologics are innovative medicines characterized by a targeted mode of action and reduced side effects for patients. Their biosimilar versions make these state-of-the-art therapies affordable and accessible for an increasing number of patients.

Fresenius Kabi expects first sales towards the end of 2019 and estimates to ramp-up the business to high triple-digit million sales from 2023 onwards based on the current product development schedule. Fresenius Kabi has agreed to pay single digit percentage royalties to Merck based on sales.

Mats Henriksson, CEO of Fresenius Kabi, said: “Biosimilars are a fast-growing segment within the pharmaceutical market. Some of the largest biological branded products will go off patent over the next years. With this acquisition, Fresenius Kabi enhances its position as a leading player in the injectables pharmaceutical market and further diversifies its product portfolio. The acquisition creates a platform for further growth.”

The purchase price will be up to €670 million. Thereof, €170 million will be paid in cash upon closing. Approximately €500 million are milestone payments strictly tied to achievements of development targets. Analytical testing, clinical studies, quality requirements specific to biosimilars as well as marketing and sales activities are expected to result in increased costs for Fresenius Kabi. These costs are expected to occur in uneven tranches. The total expected cash-out and self-imposed investment ceiling is estimated to be up to €1.4 billion until projected EBITDA break-even in 2022. From 2023 onwards, the acquisition is expected to be significantly accretive to Group net income¹ and Group EPS¹.

The transaction is subject to regulatory approvals and other customary closing conditions and is expected to close in H2/2017.

The total investment in the biosimilars business will be mainly cash flow financed.

Implications of transactions on Group Financials

Fresenius confirms its 2020 earnings¹ target range of €2.4 to 2.7 billion.

Both transactions combined are expected to be neutral to Group net income¹ and EPS¹ by 2020 and accretive from 2021 onwards. Before amortization, both transactions combined are projected to be neutral to Group net income² and EPS² by 2018 and to contribute positively from 2019 onwards.

Group net debt/EBITDA will temporarily increase to approximately 3.3 after closing of both transactions. The leverage ratio is expected to return to approximately 3.0 at the end of 2018.

^{1 Net income attributable to shareholders of Fresenius SE & Co. KGaA
2 Net income attributable to shareholders of Fresenius SE & Co. KGaA; before integration costs}

Telephone Conference
A telephone conference concerning the acquisition of Akorn and Merck KGaA’s biosimilars business will be held at 2.00 p.m. CEST on 25 April 2017. All investors are cordially invited to follow the conference call in a live broadcast via the Internet at https://www.fresenius.com/events-and-presentations. Following the call, a replay will be available on our website.

# # #

For additional information on the performance indicators used please refer to our website https://www.fresenius.com/alternative-performance-measures.

For information regarding non-GAAP financial measures or adjusted figures derived from Akorn’s public information, please see section “Non-GAAP Financial Measures” on Akorn’s FY/16 press release using following link: http://investors.akorn.com/phoenix.zhtml?c=78132&p=irol-newsArticle&ID=2250528

Fresenius Helios closed its €5.76 billion acquisition of IDC Salud Holding S.L.U. (”Quirónsalud”) today, as planned. Quirónsalud will be consolidated as of February 1, 2017.

Of the total purchase price for Spain’s largest private hospital operator, €5.36 billion had already been debt-financed. The balance of €400 million was paid in the form of 6,108,176 new Fresenius shares issued today from authorized capital excluding subscription rights.

Quirónsalud’s network is comprised of 43 hospitals, 39 outpatient centers and about 300 Occupational Risk Prevention centers located in all economically important areas of Spain. The company has about 35,000 employees and offers the full spectrum of inpatient and outpatient care. With the acquisition, Fresenius Helios strengthens its position as Europe’s largest private hospital operator.

• No conditions by Spanish antitrust authority
• Closing of transaction expected by January 31, 2017

Fresenius Helios today received antitrust approval to acquire Quirónsalud, Spain’s largest private hospital operator. The relevant Spanish antitrust authority has approved the transaction without imposing conditions. The acquisition can therefore be closed by January 31, 2017. Quirónsalud will be consolidated as of February 1, 2017.

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. With the acquisition, Fresenius Helios strengthens its position as Europe’s largest private hospital operator.

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.

• 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.