The Dialysis Consolidation Cycle Continues

The latest iteration of dialysis clinic musical chairs continued this week when Frazier Healthcare and New Enterprise Associates revealed themselves as the buyer of divested DaVita clinics under the new-old-name DSI.

A few weeks ago, DaVita announced that it had agreed to divest 30 clinics for $91 million in order to comply with federal regulators to close its acquisition of DSI Renal. Frazier and NEA announced Oct. 4 that they had acquired the 30 clinics and plan to operate them as one company called DSI. This, however, is different from the DSI Renal that DaVita purchased for roughly $690 million.

It’s an interesting time, and we’ve seen from the past that consolidation can lead to new companies. However, those new companies can also be bought up furthering the consolidation. Renal Advantage and DSI Renal were formed from divested clinics from the large DaVita-Gambro and Fresenius-Renal Care Group mergers, but they were the most recent buys by the dialysis giants.

ClickHERE to view a slide show of recent dialysis provider mergers & acquisitions.

As the new DSI gets off the ground, Fresenius may also need to divest some clinics to satisfy regulators to approve its $1.7 billion acquisition of Renal Advantage and Liberty Dialysis. Assuming this is the case, new suitors could be lining up.  One could be thenew company American Dialysis Corporation, which is led by Thomas K. Langbein, the former chairman of Dialysis Corporation of America, which itself was sold in 2010 to U.S. Renal Care for $110.25 million. Then again, it could be anybody. The one thing that is certain is that we likely haven’t seen the last dialysis merger and acquisition. Stay tuned.