German based Linde AG (ETR:LIN) (FRA:LIN) plans to expand its operations in the health care industry by acquiring Florida based Lincare Holdings Inc. (NASDAQ:LNCR), a respiratory therapy equipment provider for homes for approximately $ 3.8 billion.
Linde offers to buy all of Lincare’s outstanding stock on a cash transaction for $41.50 per share, a 22 percent premium of the company’s stock value during the closing of trading last Friday (June 29) or 64 percent premium after Lincare announced its proposed sale transaction including its $800 million debt to Linde on January 26.
Wolfgang Reitzle, CEO of Linde AG, described the health care industry as a “global mega trend” due to the growing number of senior citizens worldwide and the advent of new medical treatments. He said, “Health care is one of our three growth pillars.” In addition, he is confident that the acquisition will increase the sales of company’s North American gases Division.
John Byrnes, CEO of Lincare said that the company’s board of directors approved the transaction. He said that the merger “will afford the company benefits it would not be able to realize on its own.”
Last year, Lincare reported $1.85 billion in revenues, up by 10.7 percent compared with its revenues in 2010. Almost 50 percent of Lincare’s revenues come from Medicare patients.The company operates 1,091 local centers providing respiratory therapy to in home patients located within the 48 U.S. states and in Canada. The company has approximately 11,000 employees.
According to Linde, it will finance the acquisition though its available cash. It will also secure a $4.5 billion loan from Morgan Stanley (NYSE:MS) and Deutsche Bank AG (NYSE:DB). The company expects to close the transaction within the third quarter.
Linde also acquired Air Products and Chemicals, a European home care unit for $751 million ealy this year. The data from Standard & Poor’s Capital IQ showed that the company acquired 27 companies since 2007.
Linde specializes in making gases for medical purpose s including oxygen therapy, aerosol therapy and anesthesia. Last year, the company reported $17.5 billion in revenues and it has approximately 50,500 workers in more than 100 countries.
Lincare Holdings Inc. (NASDAQ:LNCR) is up 21% to $41.33 a share at the time of this writing.