UnitedHealth Group Inc. has won the boardroom battle for home health and hospice player Amedisys Inc., which it will pair with the LHC Group operations it acquired last year inside its Optum group of companies.
The Amedisys board of directors has accepted United’s plans to pay $101 in cash for each Amedisys, an increase of $1 per share from the Minnesota-based industry titan’s initial offer made early this month. That came after Amedisys’ board had agreed to join forces with infusion-focused Option Care Health Inc. This latest agreed-to offer, which valued Amedisys at about $3.3 billion, still needs approval from Amedisys’ investors as well as regulators. It also calls for Option Care to receive a $106 million deal termination payment.
Baton Rouge-based Amedisys employs about 18,000 people at more than 520 care centers across the country. Those people make more than 11.2 million visits annually to about 455,000 patients. By comparison, LHC performed about 12 million in-home visits per year from nearly 1,000 locations when Optum announced its purchase of the company. Combined, the two businesses give Optum close to 10% of the broader U.S. home health market and, analyst Josh Raskin of Nephron Research wrote early this month, generate more than $400 million of EBITDA on about $5 billion in annual revenues.
“While we are disappointed in this outcome, Option Care Health has a long track record of delivering value for our shareholders,” Option Care President and CEO John Rademacher said in a statement. "We take a disciplined approach to acquisitions and, as we evaluated our options, we applied this discipline to ensure we continue to create value for all of our key stakeholders."
UnitedHealth shares (Ticker: UNH) rose nearly 1% to $480.60 on the acquisition news June 26. They are down about 7% year to date, which has trimmed the company’s market capitalization to about $447 billion. Shares of OptionCare (Ticker: OPCH) also rose on word of Optum’s deal and the $106 million coming its way; in midday trading, they were changing hands at $31.90, up more than 5% on the day and to within shouting distance of their value before Rademacher and his team announced their plan to buy Amedisys.