What’s American Renal Associates Holdings’ Growth Strategy?



Growth strategy

American Renal Associates Holdings (ARA) has adopted a multi-pronged growth strategy to continue on its growth path. Key elements of these strategies are as follows:

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Strong partnerships

The company partners with high-quality nephrologists with strong local market reputation and patient relationships. Its nephrologist partners also generate awareness and recognition about American Renal Associates Holdings within the broader nephrology community and provide recommendations of potential new nephrologist partners.

Organic growth

The company intends to leverage its joint venture model to continue to develop de novo clinics in new as well as existing markets in the United States. It maintains an active pipeline of de novo clinics to be opened in the future. At the end of December 2017, American Renal Associates Holdings had 177 clinics developed as de novo clinics in its portfolio. It also focuses on capacity expansion at existing clinics. From 2013 to 2017, the company added 148 dialysis stations to its existing clinics, which represents the addition of nine de novo clinics per year.

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Acquisition opportunities

American Renal Associates Holdings currently operates 51 clinics that it acquired and integrated with its joint venture model. The company pursues acquisitions in situations where it believes the nephrologist could be a potential partner and there is an attractive opportunity to enter a new market or expand within an existing market. Since 2013, the company has acquired 23 clinics. These clinics witnessed on average a 35% increase in revenues in the 12 months following the acquisition.

Focus on best practices management services

American Renal Associates Holdings continues to focus on providing high-quality patient care, clinical autonomy to physicians, and extensive operational and managerial support to its clinics through management services arrangements. This approach enables the company to generate significant cash flows from the operation of its joint venture clinics.

In the next part of the series, we’ll take a look at the financial performance of American Renal Associates Holdings.


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