July 2, 2012 / 2:13 AM / 5 years ago

UPDATE 2-Germany's Linde to buy Lincare for $4.6 bln

* Deal for $41.50 per share, a 22 pct premium

* To be funded with $4.5 bln acquisition loan

* Expected to close in fiscal Q3 2012

By Greg Roumeliotis

NEW YORK, July 1 (Reuters) - German industrial gas producer Linde AG said on Sunday it has agreed to pay $4.6 billion for Lincare Holdings Inc, a Florida-based provider of oxygen and respiratory therapy services to patients in the home.

The deal is the latest sign of inroads that industrial gas suppliers are making in the homecare market, which is growing 6 to 9 percent annually, driven mainly by cost-cuts at hospital operators and an aging population.

In its 2011 annual report, Lincare, which serves more than 800,000 customers in the United States and Canada, estimated that the total U.S. home respiratory market represented about $6 billion in annual sales.

This appealed to Linde, which said in a statement on Sunday it had signed a merger agreement with Lincare based on a cash offer of $41.50 per common share, a 22 percent premium, as Lincare shares ended trading at $34.02 on Friday.

Linde added it would fund the deal with available cash and a $4.5 billion acquisition loan, which will be refinanced by debt and equity issuances. It expects the deal to close in the third fiscal quarter of 2012.

In January, Linde bought the European homecare business of U.S. rival Air Products and Chemicals Inc for $750 million.

Linde, which is also the world No. 2 industrial gases producer, saw homecare sales rise by 6 percent in 2011 to 300 million euros ($379 million). Lincare posted net revenues for 2011 of $1.85 billion, a 10.7 percent increase year-on-year.

Linde chief executive Wolfgang Reitzle told reporters in May the company might make further acquisitions in the healthcare business and that any possible deal would be manageable in size.

Linde’s main customers are in the steel and chemical sectors but it also supplies gases used to process solar cells, make LCD flat screens and lift the giant helium character balloons of Macy’s Thanksgiving Day Parade in the United States.

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