DaVita Inc. (NYSE:DVA) entered into a definitive merger agreement to acquire HealthCare Partners, LLC (HCP) from Summit Partners, Robert Margolis, Managing Directors, William Chin, Matthew M. Mazdyasni, and Thomas Paulsen and other shareholders for $4.7 billion on May 20, 2012. Each HCP member may elect to receive consideration in the form of cash or stock, or a combination thereof; provided, that the total consideration to be issued to all HCP members will be comprised of a maximum of $3.66 million in cash and 9.38 million shares of DaVita Common Stock. The total consideration will be paid to the holders of HCP Common Units and options to purchase HCP Common Units. An additional merger consideration of up to $275 million in cash will be payable to the HCP members and holders of HCP Options, if certain performance targets are achieved in 2012 and 2013 by the HealthCare Partners. Specifically, if the earn-Out EBITDA for the fiscal year ended December 31, 2012 and December 31, 2013 is equal to or greater than $550 million and $600 million respectively, then DaVita will pay $137.5 million in cash for each year. The purchase price is subject to post-close adjustments and contingent consideration. The cash portion will be funded through a combination of available cash, additional borrowings under DaVita's existing senior secured credit facilities and additional debt financing. JPMorgan Chase Bank, N.A has committed to provide a portion of debt. The transaction received funding through a term loan of $3 billion. DaVita will be required to pay HealthCare Partners a reverse termination fee of $125 million if either party terminates the agreement because the closing has not occurred by November 30, 2012 or any other conditions have not been fulfilled. In 2011, HealthCare Partners generated revenues of approximately $2.4 billion, EBITDA of $527 million, net income of $409 million and an operating income of $488 million. DaVita, HealthCare Partners and Robert Margolis, Managing Directors, William Chin, Matthew M. Mazdyasni, and Thomas Paulsen entered into an escrow agreement pursuant to which an escrow amount of $559.38 million will be maintained in escrow account. In addition, each of Robert Margolis, William Chin, Matthew Mazdynasi, Zan Calhoun, and Lorie Glisson has entered into an employment agreement with DaVita. Upon completion of the transaction, HealthCare Partners will operate as a separate subsidiary of DaVita HealthCare Partners, Inc. HealthCare Partners' senior managers will remain in charge of the existing company, while its current Chairman and Chief Executive Officer, Robert Margolis, will take a seat on the Board of Directors of the combined company and become Co-Chairman alongside Kent Thiry. Upon closing, the combined company will be named DaVita HealthCare Partners Inc. The transaction is subject to clearance from Hart-Scott-Rodino, approval by shareholders of HealthCare Partners and any third party and declaration of the effectiveness by the Securities and Exchange Commission of the Registration Statement on Form S-4. The transaction has been approved by the Board of Directors of DaVita and unanimously by HealthCare Partners. Also in addition, Robert Margolis, William Chin, Matthew Mazdynasi, Thomas Paulsen, Zan Calhoun, Lorie Glisson, Sherif Abdou and Amir Bacchus have entered into a non-competition and non-solicitation agreement with DaVita. The transaction is expected to close in the fourth quarter of 2012. The transaction will be neutral to modestly accretive on a GAAP basis. On July 3, 2012, Federal Trade Commission granted early clearance of antitrust concerns under the Hart-Scott-Rodino Act to the transaction. As of July 6, 2012, DaVita and Healthcare entered into an amended agreement pursuant to which the stock based awards definition has been altered. All costs and expenses of the member representative incurred in performing his obligations under this Agreement shall be paid or recovered from funds in the MR escrow account. JP Morgan Securities, LLC acted as financial advisor, Spencer D. Klein of Morrison & Foerster LLP and Sheppard Mullin Richter & Hampton LLP acted as lead advisor to DaVita. Robert D. Mosher of Nossaman LLP and Robert E. Denham, Mark H. Kim, Kimberly Ann Chi, Renee Delphin-Rodriguez, Jasmine M. Roberts, Stephen D. Rose, Williana H. Chang and Patrick G. Anderson of Munger, Tolles & Olson LLP acted as legal advisors to HealthCare Partners. Computershare Trust Company, N.A. acted as transfer agent to DaVita.