UnitedHealth just announced a $5.40 billion acquisition

on Mar 29, 2022
  • UnitedHealth says it will buy LHC Group Inc for $5.40 billion in cash.
  • The $170 a share deal is expected to close in the back half of 2022.
  • The acquisition will be modestly accretive to UNH's net earnings in 2023.

LHC Group Inc (NASDAQ: LHCG) stock opened 8.0% up on Tuesday after UnitedHealth Group Inc (NYSE: UNH) said it will buy the home healthcare services company for $5.40 billion in cash.

What it means for LHC shareholders

The deal that translates to $170 a share is expected to close in the back of 2022. The acquisition will see LHC become a part of Optum – UNH’s health services and innovation business.

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LHC Group has a footprint in 37 states across America. In the press release, Optum CEO Wyatt Decker said:

LHC’s sophisticated care coordination capabilities and its warm, human touch is so important for home care, and will greatly enhance the reach of Optum’s value-based capabilities along the full continuum of care.

What’s in it for UnitedHealth

UnitedHealth expects the deal to be modestly accretive to its adjusted net earnings in 2023 and advance strongly in subsequent years. The agreement is yet to secure regulatory approval and also a nod from LHC shareholders. LHC CEO Keith Myers said:

Working together as organisations committed to caring for the most vulnerable in society will help us more effectively and efficiently deliver high quality and increasingly value-based in the home.

UNH will also receive $10 million in investment from co-founders Keith and Ginger Myers upon completion of the transaction. The health insurance stock is one of Joe Terranova’s top picks for 2022.

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