A deal has been closed for the sale of the Nephromor chain of community dialysis institutes, owned by Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA) and Clalit Health Services to German company Fresenius, sources inform "Globes." The sale price is NIS 300-350 million. The negotiations for the sale of the chain were first reported in "Globes" six months ago.
Founded in 1994, Nephromor provides dialysis services - a substitute medical treatment in cases of inadequate kidney functioning. The acquiring company, Fresenius Medical Care, is dual-listed on the New York and Frankfurt Stock Exchange at a market cap of $36.7 billion. According to Nephromor's website, it is the largest private dialysis services company in Israel.
The private market accounts for 47% of all dialysis services in Israel, and Nephromor performs 51% of the treatments carried out in the private market, according to the company's figures. The trend towards transferring dialysis treatment from the hospitals to the community has been picking up steam in recent years. In a presentation published by Nephromor three years ago, it said that this trend was designed to make things easier for patients and improve their quality of life, and that the cost of treatment was lower than the equivalent treatment in a hospital. The presentation also said that the company was emphasizing the "customer experience" and the friendliness of the procedure for the patient. The company also offers its services to overseas patients (medical tourism) at $400 per dialysis treatment, not including drugs.
Before the acquisition, ownership of Nephromor was divided between Teva, owner of about half of the company through its Teva Medical subsidiary, which markets medical equipment in Israel, and Clalit Health Services, which holds its stake through the Mor Institute. For Teva, the sale of its Nephromor stake is not a significant deal, and is clearly not expected to have any substantial effect on the company's results. At the same time, the deal fits in well with Teva's focus on its core business under the management of CEO Erez Vigodman.
Fresenius Medical Care, considered the world's largest dialysis company, manufactures and markets dialysis machines and related equipment, and provides services to patients The company, which has over 100,000 employees, operates a chain of more than 3,400 dialysis clinics in dozens of countries around the world. The company's strategy includes growth through acquisitions. The company's revenue totaled $7.4 billion in the first half of 2015, 4.5% more than the corresponding period last year, but its net profit shrank 5.3% to $528 million.
Published by Globes [online], Israel business news - www.globes-online.com - on October 18, 2015
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