April 3 (Bloomberg) -- Sweden's billionaire Wallenberg family agreed to pay 30.7 billion Swedish kronor ($3.9 billion) for the rest of Gambro AB as sales growth at the world's largest seller of dialysis products trails rivals.

Gambro's board is recommending shareholders take the cash offer of 111 Swedish kronor a share, a 19 percent premium to last week's closing price. Investor AB, the family's holding company, already holds 19.9 percent of the health-care products maker, the Stockholm-based company said today in a statement.

Gambro sold its U.S. clinics to DaVita Inc. in 2004 for $3.1 billion to concentrate on making devices used in the $8 billion-market for dialysis. Today, Gambro said sales will increase between 6 percent and 9 percent this year. That compares with German rival Fresenius Medical Care AG's estimate of 25 percent growth. By taking Gambro private, the family's EQT Partners AB and Investor can focus on expansion, officials said.

``Investor and EQT have a pretty long investment horizon and I don't see the real value from future product launches especially in blood collection, BCT, coming through until three to four years from now,'' said Hans Mahler, an analyst at Handelsbanken with a ``buy'' rating on the stock. ``Investor has known Gambro for a long time and may see some hidden value in the company.''

Shares of Gambro rose 17 kronor, or 18 percent, to an almost 15-year-high of 110 kronor at the close of trading in Stockholm. The stock has risen 27 percent this year. Investor shares rose 5 kronor, or 3.5 percent, to 146.5 kronor, the highest since 2001.

`Different Opportunities'

The Wallenberg family has board seats on about one-third of the members of Stockholm's benchmark OMXS30. Investor has about 19 percent of its holdings in health-care companies, including a stake in London-based drugmaker AstraZeneca Plc.

``There are different opportunities for Gambro in product launches and of a geographical type,'' said Lennart Johansson, head of business development at Investor, in an interview. ``The management will be able to take advantage of those opportunities rather than going on road shows and doing quarterly reports.''

Investor and EQT are paying about 2.2 times Gambro's revenue and 12.3 time the company's earnings before interest, taxes, depreciation and amortization, or EBITDA. That compares with 2.7 times revenue that Fresenius Medical spent on its $3.9 billion purchase of Renal Care Group Inc. Fresenius Medical paid 11.6 times EBITDA.

Dialysis cleans the blood in people with kidney failure to keep them from developing uremia, a toxic condition resulting from the build up of waste products usually excreted in urine. The market for dialysis products such as artificial kidneys and dialysis machines is worth about $8 billion.

Today's offer by Investor and EQT values the entire company at 38.3 billion kronor. Gambro expects 2006 sales will rise between 6 percent and 9 percent and margins will be ``slightly lower'' than last year.

`Pretty Close'

``The price is pretty close to our sum of the parts,'' Mahler said.

Bad Homburg, Germany-based Fresenius Medical, the world's largest provider of dialysis services, makes the filters and dialysis machines used at its 1,645 clinics around the world. It also sells the products to other health-care companies and clinics.

The German company expects 2006 sales to be helped by last year's purchase of U.S.-based Renal Care Group Inc., and that it will increase its share of the global dialysis treatment market to about 15 percent over the next five years.

In July, Gambro signed an agreement to supply Baxter International Inc. with dialysis machines and products. The agreement will cover all of Baxter's clinics except those in Japan.

The company, which began mass production of single-use artificial kidneys and dialysis machines in 1967, also has an agreement to supply DaVita with renal products for at least 10 years and jointly develop dialysis products. Gambro has handed about half the money from its unit sale to DaVita back to shareholders.

The Wallenbergs, whose ancestors include the co-founder of aluminum producer Norsk Hydro ASA, have board seats on about one-third of the members of Stockholm's benchmark OMXS30 Index through Investor AB and family foundations.

EQT, the family's buyout company, is investing a 2.5 billion-euro ($3 billion) takeover fund it raised in 2002. Investor's asset value rose 8 percent to 134 billion kronor in the fourth quarter, helped by stakes in ABB Ltd. and Atlas Copco AB.

Buyout firms use a combination of their own funds and debt to pay for takeovers. They then typically seek to expand those companies or improve performance before selling them within five years to other funds or to investors through stock offerings.

Globally, 5,800 takeovers valued at $859 billion were announced in the first three months of 2006, the fastest start since the record M&A year of 2000, Bloomberg data show.

The health-care industry has accounted for many of those purchases. German drugmaker Bayer AG is paying 16.3 billion euros for rival Schering AG, beating out an offer from Merck KGaA.

Last week, shareholders approved Boston Scientific Corp.'s $27.5 billion acquisition of troubled heart-device maker Guidant Corp. today, clearing the way for a combination that may reshape the medical-technology industry.

The purchase would help Boston Scientific compete with Johnson & Johnson in capturing the biggest share of $6 billion in cardiac-stent sales worldwide each year. Natick, Massachusetts-based Boston Scientific also would rank second in the $6.6 billion-a-year market for implantable defibrillators, iPod-sized devices that shock faltering hearts into a normal rhythm.

To contact the reporter on this story: Heidi Christensen in Copenhagen at hchristensen@bloomberg.net

Last Updated: April 3, 2006 13:15 EDT