Piper Jaffray Reiterates Overweight Rating, $97 PT for DaVita

In a report published earlier today, Piper Jaffray & Co. reiterated its Overweight rating and $97.00 price target for DaVita, Inc. DVA, related to DaVita's recently-announced acquisition of HealthCare Partners. Piper Jaffray went on to say “DVA is paying approximately $4.42 billion to acquire HealthCare Partners which is about 1.8x TTM revenue and 8.4x TTM EBITDA. The transaction will be financed with approximately 9.38 MM shares of DVA common stock with an estimated value of ~$758 MM, with the remainder coming from available cash, additional borrowings under DVA's senior credit facility and additional debt financing. DVA does expect to amend its senior credit facility. Assuming modest 5% revenue growth in 2012 and 2013 from HealthCare Partners and consistent operating margins of about 20% we believe the transaction could add ~$1.46 in 2013.” DaVita, Inc. closed on Friday at $80.81.