As DaVita continues its expansion, Warren Buffett’s company Berkshire Hathaway is expanding their holdings right along with them. On January 9, 2013, Berkshire Hathaway increased their stake in the company by 1.3%. This is the 12th time they purchase more shares since last October, which we learned according to GuruFocus. This is the second purchasing move made by Berkshire Hathaway during the new year. They are even more interested now that DaVita is partnering with its competitor Fresenius Medical Care, and they are making great headway in the European market.
This most recent purchase now puts Berkshire Hathaway in control of 14.65% of the company, and they are the largest shareholder of DaVita. The Vanguard group is next in line, and they only own 5.52%. This company is in the number eight position in Warren Buffett’s high-quality, predictable and selective portfolio of companies he buys for the long-term.
2013 has barely begun, and yet DaVita has already made two significant steps in their growth. This past January 8, 2013, they announced their partnership with Fresenius Medical Care, another leading company in the dialysis services sector, and they have provided this type of care to 33% of the market in 2011. Under the agreement made, FMC will use DaVita Rx prescription drug services in order to fulfill and then ship their oral medications to Medicare patients in the United States of America.
DaVita Rx was created back in 2005, and is the first and biggest full-service pharmacy exclusively dedicated to patients with kidney troubles. The partnership is going to help Fresenius comply with a mandate by Congress that says all oral end-stage renal disease medications be part of a bundled payment model by the year 2016.
On January 7, 2013, the company announced that they purchased nine dialysis centers from Fresenius, and they were located in Poland and Portugal. With these acquisitions, the company now has 33 total dialysis centers outside of the United States, and 1,912 centers within the United States.
This is a company focused on high-growth, and their revenue has increased annually at a rate of 19% over the last 10 years. During this same time period, their EBITDA grew at a rate of 21.4%, their free cash flow rose 9.8% and the company’s book value grew at 34.7%.