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Renal America to Become Nation's Fourth Largest Provider of Outpatient Dialysis Services

Posted on: Friday, 29 July 2005, 09:00 CDT

Company Signs Agreement with DaVita and Gambro Healthcare US to Purchase 70 Centers

Brentwood-based Renal America, Inc. will become the fourth largest provider of outpatient dialysis services in the U.S. when it completes the purchase of 70 freestanding renal dialysis centers in ten states. The centers are being divested by DaVita Inc. (NYSE: DVA) and Gambro Healthcare US as a result of DaVita's acquisition of Gambro Healthcare US.

A definitive agreement for Renal America to purchase the centers for $320.5 million was announced today. The newly-formed company was founded by CEO Michael D. Klein, who most recently served as a senior executive for Gambro Healthcare. Renal America has teamed with Welsh, Carson, Anderson & Stowe (WCAS), one of the country's most experienced and successful health care investors, to finance the acquisition of the centers.

"We are committed to establishing a direct connection with our clinics and to provide a high level of service to our physicians, employees and patients," Klein said. "We have a detailed transition plan to ensure the continuity of dialysis services to the patients of these clinics after the acquisition."

WCAS General Partner, D. Scott Mackesy, said, "As with many of our other successful healthcare investments, we are excited to partner with the Renal America management team to execute a buy-and-build growth strategy in the outpatient dialysis industry."

Among WCAS's investments in health care providers are Ardent Health Services, Concentra Inc., AmeriPath, MedCath, Select Medical and US Oncology.

Renal America's management team includes professionals experienced in organizing, growing and operating health care companies. It includes Dean Weiland, chief operating officer; Juha Kokko, MD, chief medical officer; and Karl Kokko, chief information officer.

Renal America is committed to establishing a more cooperative relationship with its clinics than the larger national competitors in the marketplace, providing high levels of service to physicians, employees and patients.

"Once we have successfully completed the acquisition and integration of these 70 clinics, our focus will be on maintaining operations, continually improving patient outcomes and new clinic development," Klein said.

He anticipates the partnership with WCAS will provide access to the financial resources required to capitalize on future development and acquisitions.

Raymond James & Associates served as financial advisor to Renal America for this transaction.

About Renal America (www.Renal America.com):

Based in Brentwood, Tenn., Renal America, Inc. was founded by veteran health care executives to build a leading national provider of high-quality dialysis services. Its growth plan begins with the acquisition of 70 dialysis clinics that are being divested by DaVita Inc., in conjunction with its acquisition of Gambro Healthcare US. Following the acquisition, Renal America will be the fourth largest provider of outpatient dialysis services in the U.S.

Renal America has teamed with Welsh, Carson, Anderson & Stowe to finance the acquisition. Welsh Carson has over $12 billion of capital under management and is one of the most experienced and successful health care investors with interests in a number of alternate site health care providers, including Ardent Health Services, Concentra Inc., AmeriPath, MedCath, Select Medical, and US Oncology.

Source: Business Wire

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