DaVita upsizes senior notes offering to $1 billion

DENVER - DaVita Inc. (NYSE: DVA), a leading health care provider with a market capitalization of $11 billion and annual revenue of nearly $13 billion, has upsized its private offering of senior notes due 2033, increasing the aggregate principal amount from $750 million to $1 billion. According to InvestingPro data, the company maintains a GREAT financial health score, reflecting its strong market position in the Healthcare Providers & Services industry. The notes, priced at their face value, carry a 6.750% coupon and are anticipated to close on May 23, 2025, subject to customary closing conditions.

The net proceeds from the sale of the 2033 notes will primarily be used to repay existing revolving credit facility borrowings and the associated accrued interest. With total debt of $12.3 billion and a healthy current ratio of 1.25, the company maintains a balanced approach to liability management. Remaining funds, if any, are earmarked for general corporate activities, which may include stock repurchases, working capital, and capital expenditures. InvestingPro analysis indicates management has been actively buying back shares, demonstrating confidence in the company’s financial outlook.

This offering targets qualified institutional buyers in accordance with Rule 144A under the Securities Act of 1933, as amended, and certain non-U.S. persons in offshore transactions following Regulation S under the same act. The 2033 notes have not been registered under the Securities Act or any state securities laws and may not be offered or sold within the United States without registration or an exemption from the registration requirements.

DaVita, known for its comprehensive kidney care and a history of clinical quality and innovation spanning 25 years, continues to focus on enhancing the quality of life for patients worldwide. Trading at a P/E ratio of 14 with a substantial free cash flow yield of 16%, the company appears slightly undervalued according to InvestingPro’s Fair Value analysis. Discover more insights and 6 additional ProTips about DaVita in the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.

The information provided in this article is based on a press release statement from DaVita Inc. The release also contains forward-looking statements subject to risks and uncertainties that could cause actual results to differ materially from those projected. These statements are not guarantees of future performance and involve certain risks, uncertainties, and assumptions that are difficult to predict. As such, readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates.

In other recent news, DaVita Inc. reported its first-quarter earnings for 2025, surpassing expectations with an adjusted EPS of $2.00, compared to the forecast of $1.96. The company’s revenue also slightly exceeded projections, coming in at $3.22 billion against the anticipated $3.20 billion. Despite these positive results, DaVita faced operational challenges, including a severe flu season and a cybersecurity incident, which led to a decline in U.S. treatments per day by 40 basis points. The company maintained its full-year guidance for adjusted operating income and EPS, indicating confidence in managing these headwinds.

Additionally, DaVita launched a $750 million senior notes offering, with proceeds intended to repay existing debts and support general corporate purposes. This financial move is part of the company’s broader capital management strategy. In related developments, TD Cowen adjusted its price target for DaVita shares from $165 to $157, maintaining a Hold rating. The revision reflects concerns over the company’s recent underperformance due to increased flu cases and weather-related impacts.

Despite these challenges, DaVita reiterated its full-year guidance, suggesting confidence in its strategic direction. The company also reported a decline in free cash flow, which was negative $45 million for the quarter. DaVita’s commitment to shareholder value is evident through its repurchase of $680 million in stock during the quarter.

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