Consolidated Financial Statements Notes General Notes 2. Acquisitions and divestitures 
2. ACQUISITIONS AND DIVESTITURES
ACQUISITIONS AND DIVESTITURES
The Fresenius Group made acquisitions of € 3,853 million and € 618 million in 2008 and 2007, respectively. Of this amount, € 3,053 million were paid in cash and € 800 million were assumed obligations in 2008.
Fresenius Medical Care
In the year 2008, acquisition spending of Fresenius Medical Care in an amount of € 220 million related mainly to the purchase of dialysis clinics and license agreements. In July 2008, Fresenius Medical Care entered into license and distribution agreements to market and distribute intravenous iron products. For further details on these license and distribution agreements, please see Note 18, Goodwill and other intangible assets.
Fresenius Medical Care made acquisitions of € 262 million in 2007. The main acquisition took place on November 26, 2007, as Fresenius Medical Care completed the acquisition of all of the common stock of Renal Solutions, Inc., (RSI), an Indiana corporation with principal offices in Warrendale, Pennsylvania, United States. The RSI acquisition agreement provided for total consideration of up to US$ 204 million, consisting of US$ 20 million, previously advanced to RSI in the form of a loan, US$ 100 million paid at closing, US$ 60 million paid in November 2008, US$ 3 million receivable related to a working capital adjustment, which was received in 2008, and up to US$ 30 million in milestone payments over a three year period contingent upon the achievement of certain performance criteria, none of which were due or paid in 2008. In 2007, Fresenius Medical Care recorded a liability of US$ 27.4 million representing the net present value of the US$ 30 million milestone payments as it was deemed beyond reasonable doubt that the future performance criteria would be achieved. Furthermore, acquisitions of € 115 million were mainly attributable to the purchase of dialysis centers.
Fresenius Medical Care sold the perfusion business unit of Fresenius Medical Care Extracorporeal Alliance (FMCEA) during the second quarter of 2007. In 2006, FMCEA’s perfusion business contributed revenue of approximately € 83 million. The US perfusion business was deconsolidated effective May 9, 2007.
Fresenius Kabi
Acquisitions in 2008
In the year 2008, Fresenius Kabi spent € 3,612 million which
mainly referred to the acquisitions of APP Pharmaceuticals,
Inc. (APP), United States, and Dabur Pharma Ltd., India.
Acquisition of APP Pharmaceuticals, Inc.
In July 2008, Fresenius Kabi has signed definitive agreements
to acquire 100% of the share capital of APP. APP is a leading
manufacturer of intravenously administered generic drugs
(IV generics) in North America. Through the acquisition
of APP, Fresenius Kabi enters the US pharmaceuticals market
and achieves a leading position in the global IV generics
market. APP focuses on IV generics for hospital use and distributes
its products in the US and Canada. The company
employs around 1,400 people and has modern production
facilities in Illinois, New York and Puerto Rico as well as a distribution
company in Toronto, Canada. In 2008, APP achieved
sales of US$ 777 million and an adjusted EBITDA of US$ 317
million.
After receipt of all necessary regulatory approvals and fulfillment of further closing conditions, Fresenius Kabi has completed the acquisition of APP on September 10, 2008. APP shareholders received a Cash Purchase Price of US$ 23.00 per share. Based on the Cash Purchase Price, the transaction values the fully diluted equity capital of APP at approximately US$ 3.7 billion. Furthermore, the shareholders received a registered and tradable Contingent Value Right (CVR) that could deliver up to US$ 6.00 per share additionally, payable in 2011, if APP exceeds a cumulative adjusted EBITDA target for 2008 to 2010. In addition, US$ 0.9 billion of net debt was assumed. The net debt was refinanced by the financial instruments described below.
The acquisition was financed with the following mix of debt and equity:
- Mandatory exchangeable bonds with an aggregate nominal amount of € 554.4 million (US$ 871 million) (see Note 23, Mandatory Exchangeable Bonds)
- Capital increase in an amount of approximately € 289 million (US$ 453 million) (see Note 27, Shareholders’ Equity)
- Senior secured credit facilities in an amount of US$ 2.45 billion (see Note 21, Debt and liabilities from capital lease obligations)
- Bridge Credit Agreement of US$ 1.3 billion (see Note 21, Debt and liabilities from capital lease obligations)
