Brazil's Fleury Climbs to Record After $611 Million Labs D'Or Acquisition

Fleury SA, a Brazilian provider of medical services, climbed to a record after agreeing to buy rival Labs D’Or for 1.04 billion reais ($610.7 million).

Fleury advanced 3 percent to 25.75 reais at 11:12 a.m. New York time. The stock climbed to 26.30 reais earlier today, the highest price since its initial public offering last year, as 276,100 shares traded, 60 percent higher than the daily average for the past three months.

Fleury said in a filing that it signed a memorandum of understanding to pay for 50 percent of the medical laboratory network in cash, and 50 percent in new common stock. After the transaction is completed, Labs D’Or partners will own 15 percent of Fleury, according to the statement.

The deal will help Fleury compete in Rio de Janeiro with Diagnosticos da America SA, Latin America’s biggest medical diagnostics company by market value, JPMorgan Chase & Co. said.

“Fleury has finally made an attractive use of the cash from” its IPO, JPMorgan analyst Andrea Teixeira wrote in a note to clients dated yesterday. The “deal seems accretive at attractive valuation.”

With the Lab D’Or acquisition, Fleury will provide services to 27 hospitals, up from 8 now, and expand its network in Rio de Janeiro to 85 units, from 29 now.

Rival Dasa fell 1.6 percent to 21.54 reais.

To contact the reporter on this story: Alexander Cuadros in Buenos Aires at acuadros@bloomberg.net Fabiola Moura in New York at fdemoura@bloomberg.net

To contact the editor responsible for this story: David Papadopoulos at papadopoulous@bloomberg.net

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