Linde to Acquire Lincare for USD 4.6 Billion

Industrial gas producer Linde (Munich, Germany) has agreed to pay USD 4.6 billion for Lincare Holdings (North Clearwater, FL, USA), a provider of oxygen and respiratory therapy services to patients in the home.

Following the purchase of shares in the tender offer, Linde intends to complete the acquisition of Lincare through a merger, following which Lincare will become a wholly owned subsidiary of Linde, the second largest gas producer worldwide. The merger agreement will be funded with available cash and a USD 4.5 billion acquisition loan, which will be refinanced by debt and equity issuances.

The purchase is the latest effort by Linde--which has so far focused primarily on products for use in hospitals--to extend its existing pharmaceutical and medical gases division, currently focused on hospitals and emergency centers. The move into the home oxygen-equipment market follows a previous acquisition of the European home care unit of Air Products and Chemicals (Allentown, PA, USA) for USD 751 million in January 2012.

Curiously, the merger will reunite the two companies after almost 100 years as separate entities. Lincare was originally part of Linde’s North American operations, which were bought by Union Carbide in 1917, and was then created as a separate unit. Lincare in its current form was established in 1987.

“We are excited that this strategic acquisition enables us to take the next big step in this stable, sustainable, and profitable business field,” said Wolfgang Reitzle, CEO of Linde. “Against the background of demographic changes, the healthcare industry is a megatrend in which we will be able to participate more strongly thanks to the new setup.”

The home oxygen equipment market is experiencing a 6%-9% annual growth rate (AGR), driven mainly by cost-cutting measures by hospitals and an aging population. Lincare’s range of homecare products ranges from its mainstay oxygen-therapy services, enteral therapy, and nebulizers, which are used to deliver medicines in the form of a mist.

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