* FMC takes majority stake in Sound Physicians
* FMC seeks to expand services linked to core dialysis ops
* Says deal to be operating earnings accretive in first year
* Says also acquired MedSpring Urgent Care Centers
(Adds source on size of stake, MedSpring acquisition, analyst
FRANKFURT, June 27 Germany's Fresenius Medical
Care (FMC) agreed to buy a majority stake in
U.S.-based Sound Inpatient Physicians Inc for about $600 million
in its drive to offer additional services linked to its core
business of kidney dialysis.
FMC is to become a majority shareholder as part of a
recapitalisation of Sound, alongside existing investor
TowerBrook Capital Partners and Sound's senior management team,
the company said in a statement on Friday.
A person familiar with the matter told Reuters the company's
stake in Sound would be above 80 percent.
FMC also said it was buying MedSpring Urgent Care Centers
with operations in the U.S. states of Illinois and Texas,
without providing financial details.
Dialysis specialist FMC said at its investor day in April it
aimed to expand its services to medical fields related to kidney
failure in a push to almost double group sales to $28 billion by
Analysts at Berenberg said the acquisitions should take
FMC's annual revenues from so-called total care coordination to
more than $1 billion, compared with a goal to reach $5 billion
euros a year by 2020.
"To put this in context, FMC will shortly be 20 percent of
the way to its goal three months into a six-year programme. The
market wanted progress, and that is what it appears FMC is
making," they said.
Sound Physicians employs and manages physicians working at
more than 100 hospitals across the United States. It provides
medical staff to hospitals, also offering services such as
billing, accounting and purchasing management.
Medical insurers in the United States are gradually moving
towards a system of lump sum payments per chronically ill
patient rather than reimbursing individual drugs and services.
Insurers hope to cut costs because the system, called
disease management or care coordination, encourages healthcare
providers to work more diligently, reduce side effects and
increase patients' compliance with the treatment regimens.
FMC said it expects Sound to generate about $500 million in
revenue in the next 12 months and sees it adding to its own
operating earnings, adjusted for transaction costs, within the
first year after closing. Closing is due in the next 10 days.
It said it would fund the acquisition through available cash
and committed credit facilities as well as additional debt
(Reporting by Ludwig Burger; Editing by Maria Sheahan; Editing
by Elaine Hardcastle)