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DSI Holding Company, Inc. Completes Acquisition of Over 100 Dialysis Centers From Fresenius Medical Care for Approximately $511 Million

Posted on: Tuesday, 11 April 2006, 09:01 CDT

NEW YORK, April 11 /PRNewswire/ -- DSI Holding Company, Inc. (DSI) today announced that, through a wholly owned subsidiary, it has completed the acquisition of 105 freestanding kidney dialysis clinics, three home dialysis programs and one stand-alone renal acute program in the U.S. from Fresenius Medical Care Holdings and Renal Care Group. Ten dialysis clinics and two home programs are located in Illinois and will be transferred once Illinois regulatory approval is received. DSI is backed by Centre Partners, a leading middle market private equity firm.

The purchase of the clinics immediately provides DSI with substantial scale, a strong presence in several key geographic markets across the country and multiple growth opportunities through de novo and satellite development, joint ventures and acquisitions. Pro forma for the acquisition, DSI is now the third largest for-profit provider of outpatient kidney dialysis services in the United States, as measured by the number of clinics, with a significant presence in many major markets, including Atlanta, Chicago, Kansas City, Memphis, Orlando, Phoenix and Tampa.

Based in Nashville, Tennessee, DSI is involved in the acquisition, development and operation of kidney dialysis clinics, hospitals, and acute care centers. DSI is led by its Chairman, President, and CEO, Jerome Tannenbaum, M.D., Ph.D., FACP.

Dr. Tannenbaum was a practicing nephrologist when he founded REN Corporation-USA in 1986, which under his leadership grew to become the fourth largest dialysis company in the United States before it was sold to global medical technology company Gambro Group in 1995. Dr. Tannenbaum later founded National Nephrology Associates, a privately held dialysis company that provided services to 5,800 patients in 89 clinics before it was acquired by Renal Care Group in 2004.

"DSI is excited to complete the acquisition of a strong mix of dialysis clinics throughout the U.S.," said Dr. Tannenbaum. "The addition of these facilities is critical to the execution of our vision of building a nationwide healthcare services company that works with physicians to bring them the best facilities, equipment, technology and administrative services in order to provide the best patient care possible. We are thrilled to be involved with such outstanding physicians and nurses and look forward to our new relationship together."

Centre Partners' Managing Partner Bruce Pollack concluded, "We are extremely pleased to have partnered with an experienced management team and to acquire such a high quality group of dialysis clinics that gives us a significant national presence. These clinics are located in highly desirable markets where we expect to support further growth. DSI is also now extremely well positioned to continue its expansion through additional acquisitions, de novo development and joint venture arrangements in existing and new markets."

In addition to the common equity investment led by Centre Partners, the transaction was financed with a $300 million senior credit facility, $125 million of senior subordinated notes and $40 million of preferred stock. RBC Capital Markets, RBS Securities and Ares Capital Corporation were joint book- runners on the senior debt. Ares Capital Corporation and Dune Capital were co- lead arrangers of the subordinated notes. Apollo Investment Corporation led the issuance of $40 million of preferred stock. The Northwestern Mutual Life Insurance Company also invested in common equity, preferred stock and subordinated notes. Other investors included PPM America Capital Partners II, LLC, AXA Private Equity and National City Equity Partners. Centre Partners and DSI's legal advisors were Weil, Gotshal & Manges LLP, McGuireWoods LLP, and Latham & Watkins LLP.

About DSI Holding Company, Inc.

DSI Holding Company, Inc., is involved in the acquisition, development and operation of kidney dialysis clinics, hospitals, and acute care centers. DSI is a nationwide healthcare services company that works with physicians to bring them the best facilities, equipment, technology and administrative services in an effort to provide the best patient care possible. DSI is supported by Centre Partners, a leading middle market private equity firm with offices in Los Angeles and New York. Additional information about DSI is available at http://www.dsi-corp.com/.

About Centre Partners

Centre Partners, founded in 1986, is a leading private equity firm with a middle market focus that seeks to make acquisitions and equity investments alongside management teams who have or desire a meaningful economic stake in the future success of their businesses. The principals of Centre Partners have invested over $3 billion in more than 80 companies, partnering with management teams across a broad spectrum of industries. Centre Partners provides those teams with access to its unique resources, which include an extended network of experienced and proven operating executives. Centre Partners has offices in New York City, Los Angeles and Dallas, through an affiliate, and is currently investing through its fourth fund, which has $780 million of committed capital. In addition to its recent entry into health care, Centre has deep investment expertise covering consumer, industrial products and services, media, retail, and aviation services. Additional information about Centre Partners is available at http://www.centrepartners.com/.

Media contact: Della Sweetman, Fleishman-Hillard, phone: 619-237-7721.

Centre Partners

CONTACT: Della Sweetman of Fleishman-Hillard, +1-619-237-7721

Web site: http://www.centrepartners.com/http://www.dsi-corp.com/

Source: PRNewswire

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