Fleury Climbs to Record After Labs D’Or Acquisition

Dec. 16 (Bloomberg) -- 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 2.6 percent to 25.65 reais at the 3:15 p.m. New York time close. That’s the highest closing price since its initial public offering last year. More than 413,000 shares traded, more than double the average volume of 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 was unchanged at 21.90 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