FRANKFURT Fresenius SE (FREG.DE) brushed aside difficulties acquiring Rhoen-Klinikum (RHKG.DE), instead agreeing on Friday to buy blood collection equipment specialist Fenwal Holdings in a deal sources valued at $1.1 billion.
The deal combines Fresenius Kabi, a European supplier of blood bags and filters used in manual infusion therapies, with U.S.-based Fenwal, a specialist maker of automated blood collection devices.
The transaction is expected to close at the end of 2012.
Neither Fresenius or private equity firms TPG and Maverick Capital - which own Fenwal - disclosed the value of the deal.
Fresenius, however, said the enterprise value of the deal does not exceed the proceeds from the May 2012 capital increase and will be financed from existing funds.
Moreover, Fresenius said it continues to assess its options for an acquisition of German rival Rhoen-Klinikum after an initial takeover attempt failed last month.
Through the acquisition of Fenwal, Fresenius adds high-value blood processing services to its portfolio thanks to additional transfusion technology products.
After collection, blood needs to be processed in a laboratory to separate its therapeutic components — red blood cells, platelets, plasma, or therapeutic proteins.
This enables blood centers to optimize each donation, limits further processing steps, and helps to ensure the right blood components are available in hospitals to meet patient needs, Fresenius said.
Fresenius Chief Executive Ulf Mark Schneider said in a statement, "Acquiring Fenwal is a unique opportunity to significantly expand Fresenius Kabi's medical devices transfusion technology segment."
Through Fenwal, Fresenius Kabi also gets broader access to the U.S. transfusion technology market, Schneider further said.
Fenwal, which has about 4,900 employees and operates five manufacturing facilities, will be combined with Fresenius Kabi, which has more than 24,000 employees.
In 2011, Fenwal posted sales of $614 million with an adjusted earnings before interest taxes and amortization of $90 million. In 2011, Fresenius Kabi's sales totaled 3.96 billion euros ($4.82 billion) and the company's earnings before interest, taxes and amortization came in at 955 million euros.
Barclays and Evercore Partners advised Fenwal on the transaction. ($1 = 0.8219 Euro)
(Additional reporting by Edward Taylor; Editing by Gary Crosse and M.D. Golan)