DaVita (NYSE:DVA) will purchase privately held physician network operator HealthCare Partners for $4.42 billion. The deal unites the nation’s largest chain of dialysis care centers with a physician practices firm, operating in Southern California, Southern Nevada and Central Florida.
DaVita will pay $3.66 billion in cash and issue 9.38 million shares of stock to HealthCare Partners’ owners.
Shares of DaVita rose more than 4% in late Monday afternoon trading.
The acquisition will be finalized during the fourth quarter, creating DaVita HealthCare Partners. J.P. Morgan (NYSE:JPM) advised DaVita during the acquisition.
Analysts told Reuters the deal would allow DaVita to expand its customer base while realizing cost savings demanded by changes to Medicare’s payment system.
The reforms provide incentives for clinical service providers like DaVita to lower costs and dispense fewer high-cost medications. Acquiring HealthCare Partners will permit DaVita to cut costs while lowering its risk, by combining patient care at multiple facilities, including physicians’ offices, industry analysts said.