BEVERLY, Mass.--(BUSINESS WIRE)--American Renal Associates Holdings, Inc. (NYSE: ARA), a leading provider of outpatient dialysis services, today announced that it has entered into a definitive agreement to be acquired by Innovative Renal Care, LLC, an affiliate of Nautic Partners, LLC, a middle market private equity firm, in an all-cash transaction that values the Company at an aggregate enterprise valuation of approximately $853 million excluding non-controlling interest. Under the terms of the agreement, ARA shareholders will receive $11.50 per share in cash. This consideration represents an approximate premium of 66% to the Company’s closing price on October 1st, 2020.
“At ARA, we have created a unique platform for delivering superior quality care to patients by partnering with physicians around the country. This transaction recognizes the value of the Company and delivers a meaningful premium to shareholders,” said Joe Carlucci, Chairman and Chief Executive Officer of ARA. “I have decided to delay my previously announced retirement in order to guide the Company through this transaction and into its next stage. Nautic is a firm with significant healthcare expertise and we are excited by their support as we engage with members of the IRC team for the next chapter of our Company’s growth -- drawing on our deep relationships with our physician partners and our talented staff to continue providing excellent care to end-stage renal disease patients across the U.S. We also want to thank Centerbridge Partners for their thoughtful support over these past 10 years.”
Scott Hilinski, Managing Director at Nautic, said, “ARA has established itself as a leading provider of high-quality patient care for those suffering from end-stage renal disease. Since its founding, the Company has built a successful track record working with leading nephrologists around the country while staying focused on its Core Values.”
Dan Killeen, Principal at Nautic, added, “We are excited to bring together ARA management and IRC’s complementary team of executives as we look to support the Company in executing against its strategic plan built on a differentiated, patient-centric approach to the renal care market.”
The Board of Directors of ARA unanimously approved the agreement. The transaction is expected to close in the first quarter of 2021, subject to shareholder and regulatory approvals, as well as the satisfaction of customary closing conditions. Centerbridge Partners has entered into a voting agreement pursuant to which it has agreed to vote in favor of the transaction.
The agreement includes a 40-day “go-shop” period, which permits ARA’s Board of Directors, with the assistance of independent financial and legal advisors, to actively solicit alternative acquisition proposals from third parties, and potentially enter into negotiations with parties that make alternative acquisition proposals. The Board has appointed a special committee of independent directors to oversee the go-shop process. ARA will have the right to terminate the agreement with Nautic to enter into a superior proposal subject to the terms and conditions of the agreement. There can be no assurance that this process will result in a superior proposal, and ARA does not intend to disclose developments with respect to the solicitation process unless and until its special committee or the Board of Directors makes a determination requiring further disclosure. The period commences on the date of the agreement.
Investment funds and accounts managed by HPS Investment Partners, LLC provided committed financing for the transaction.
Goldman Sachs & Co. LLC is serving as financial advisor to ARA, and Latham & Watkins LLP is serving as legal advisor to ARA. BofA Securities is serving as financial advisor to the special committee of the Board of Directors of ARA managing the go-shop process and Richards, Layton & Finger, PA is serving as its legal advisor. Guggenheim Securities, LLC is serving as financial advisor to Nautic, and Goodwin Procter LLP and Epstein, Becker & Green, P.C. are serving as its legal advisors. Raymond James & Associates, Inc. also served as an investment banking advisor to IRC.
About American Renal Associates
American Renal Associates (“ARA”) is a leading provider of outpatient dialysis services in the United States. As of June 30, 2020, ARA operated 251 dialysis clinic locations in 27 States and the District of Columbia serving more than 17,300 patients with end stage renal disease. ARA operates principally through a physician partnership model, in which it partners with local nephrologists to develop, own and operate dialysis clinics. ARA’s Core Values emphasize taking good care of patients, providing physicians with clinical autonomy and support, hiring the best possible staff and providing best practices management. For more information about American Renal Associates, visit www.americanrenal.com.
About Nautic Partners, LLC
Nautic Partners, LLC (“Nautic”) is a middle-market private equity firm that focuses on three industries: healthcare, industrials, and services. Nautic has completed over 140 platform transactions throughout its 34-plus year history. Nautic’s strategy is to partner with management teams to accelerate the growth trajectory of its portfolio companies via add-on acquisitions, targeted operational initiatives, and increased management team depth. For more information, please visit www.nautic.com.
