Pharma Capital

NxStage Medical succumbs to US$2bn offer from Fresenius

NxStage develops, manufactures and markets innovative products for the treatment of end-stage renal disease and acute kidney failure
Dialysis machine
Fresenius said it would finance the deal through a mixture of cash and debt

Fresenius Medical Care AG (NYSE:FMS) is to buy NxStage Medical Inc (NASDAQ:NXTM) in a deal that values the medtech company at around US$2bn.

Germany’s Fresenius, the world’s largest provider of dialysis products and services, has won the backing of the NxStage board for a US$30 a share offer.

NxStage shares shot up 28% to US$29.55 in pre-market trading.

“The acquisition supports our 2020 strategic initiative of driving growth in the core business with innovation, better clinical outcomes through Care Coordination and improving the patient experience,” said Rice Powell, chairman and chief executive officer of Fresenius Medical Care.

“Combining our two companies would strengthen and diversify our business in the US and help meet the evolving needs of our patients,” Powell added.

Fresenius said it would finance the deal through a mixture of cash and debt. It is targeting initial net cost synergies of US$80-100mln before tax over three to five years, though it also expects to cough up US$150mln or so in integration costs in the first three years of ownership.

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