DaVita Divests DMG To Optum, Boosts Kidney Care Services
Zacks Investment Research | Jun 19, 2019 09:02PM ET
DaVita Inc.’s (NYSE:DVA) Medical Group unit has been sold to Optum for $4.3 billion. This is expected to improve Davita’s major Kidney Care business, fortifying its foothold in the global renal care market.
Following the announcement, shares of DaVita rose 2% to close at $51.27 on Jun 19.
More on the Acquisition
The divestment, announced in late 2017, was subjected to regulatory approval and other customary closing conditions. Also, the results of DMG’s business operations have been reported as discontinued.
Notably, DaVita Medical Group (“DMG”) has now become part of OptumCare — a sub-segment of Optum — the acquiring company’s health services segment. The combination aims to improve care quality and patient satisfaction through ambulatory care delivery systems enabled by information technology and supportive clinical services.
Resultantly, DaVita will continue to own and operate its U.S. and international Kidney Care businesses.
How Does DaVita Stand to Gain?
Completion of the DMG divestment will now enable DaVita to focus on its Kidney Care wing, a significant contributor to the company’s top line. In fact, in the last reported quarter, the segment generated $382 million of revenues.
As an operating division of DaVita, DaVita Kidney Care focuses on setting worldwide standards for clinical, social and operational practices in kidney care. The latest development will boost the segment’s key services like in-center hemodialysis, home hemodialysis, peritoneal dialysis, kidney transplant, urology, diabetology and vascular access surgery.
Notably, the company has focused on expanding its Kidney Care business through continuous acquisition of dialysis centers and businesses. In fact, in the recent past, the company opened a 150,000 square-foot campus for DaVita Labs in DeLand, FL, with a view to serve DaVita dialysis clinics and their patients, marking its only laboratory in the United States. (Read More: .
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