Innovative Renal Care, a portfolio company of Nautic Partners, has significantly expanded its network through a new acquisition. The dialysis provider has added American Renal Associates Holdings, Inc. (NYSE: ARA) for $853 million, or $11.50 per share in cash, representing an approximate premium of 66% to the company’s closing price on October 1, 2020. The price includes net debt.
ARA is a leading provider of outpatient dialysis services in the United States. As of June 30, 2020, ARA operated 251 dialysis clinic locations in 27 states and the District of Columbia serving more than 17,300 patients with end-stage renal disease. ARA generated 12-month revenues of $815.8 million with EBITDA of $115.63 million. The Board of Directors of ARA unanimously approved the agreement. The transaction is expected to close in the first quarter of 2021.
The agreement includes a 40-day “go-shop” period, which permits ARA’s Board to actively solicit alternative acquisition proposals from third parties and potentially enter into negotiations with parties that make an alternative offer.
Based on search results in our HealthcareMandA.com Deal Database, the purchase of ARA by Innovative Renal Care is the first major deal for a dialysis center in over a year. Dialysis targets were slightly more popular in 2019, however. Last year, DaVita, Inc. (NYSE: DVA) acquired seven dialysis centers in the United States and 16 dialysis centers outside the United States (all undisclosed locations and names) for $98.8 million in cash.
In a separate deal in February 2019, Bain Capital (NYSE: BCSF), Summit Partners and Revelstoke Capital Partners purchased U.S. Renal Care from Leonard Green & Partners, Frazier Healthcare Partners, New Enterprise Associates and Cressey & Company. U.S. Renal Care provides in-center and at-home hemodialysis, as well as at-home peritoneal dialysis services, to 25,000 patients in 335 dialysis facilities in 32 states.
