Creating Value for All Shareholders in a Complex Transaction


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Business:

Kidney Center, Inc (“KCI” or the “Company”) owns and operates 16 dialysis centers located in Simi Valley, Thousand Oaks, Santa Paula, Camarillo and Ventura, California.


Transaction:

DaVita Inc. (“DaVita”), a provider of dialysis services for patients suffering from chronic kidney failure, has acquired certain assets including the dialysis centers from Kidney Center, Inc.


Challenges:

The majority owner of KCI owned several dialysis centers and wanted to divest a portion of his holdings to provide for a liquidity event. This transaction was complicated by an ownership structure that consisted of partial ownership of each center by the majority physician owner and mixed motivations of the remaining individual minority owners. The valuation of the consolidated entity was also difficult as growth through de novo development resulted in mature centers operating at capacity while newer locations were still expanding.


Solution:

FocalPoint was able to structure a transaction that gave each individual entity the option of participating or not participating in the contemplated transaction and ultimately the valuation of each entity, along with relative allocation of proceeds, was based on both financial and strategic considerations. By creating this level of flexibility for both the majority shareholder as well as the facility-specific physician owners, the majority physician owner was able to sell nearly all of its centers and the remaining individual owners were able to agree on the valuation methodology and participate in the liquidity event.

Kidney Center has sold certain assets to DaVita.

FocalPoint served as exclusive financial advisor to Kidney Center.

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“Dr. Ushakant Thakkar and the entire management team at KCI have dedicated themselves to improving the lives of patients with end stage renal disease. We are fortunate to have worked with such dedicated individuals to achieve a successful outcome on this initial transaction.”

Rajesh Sood
Managing Director, FocalPoint