It’s not often we see a prolific buyer such as Change Healthcare (NASDAQ: CHNG) as the target company in an acquisition, but it’s a new year with new possibilities. The digital health and analytics giant will be acquired by Optum, a member of UnitedHealth Group (NYSE: UNH) that operates OptumHealth, a population health management company; OptumInsight, a healthcare information analytics company; and OptumRx, a pharmacy benefits management company. The deal is valued at $13.17 billion, consisting of $8 billion in cash ($25.75 per share) and approximately $5.17 billion in assumed debt. The price is a 41% premium to Change Healthcare’s closing price on January 5, 2021.
Change Healthcare is a leading independent healthcare technology company and provides data and analytics-driven solutions to improve clinical, financial, administrative, and patient engagement outcomes in the U.S. healthcare system. It generated $3.02 billion in annualized 2020 revenues and $609.7 million in annualized 2020 EBITDA.
Change Healthcare’s payment capacities combined with Optum’s highly automated payment network will simplify financial interactions among care providers, payers and consumers. The acquisition is expected to be accretive to UnitedHealth Group’s net and adjusted earnings per share by approximately $0.20 and $0.50 respectively in 2022. Private equity funds affiliated with The Blackstone Group (NYSE: BX), which owns approximately 20% of the common stock of Change Healthcare, have agreed to vote the shares they control in favor of the combination.
The purchase of Change Healthcare comes after a busy 2020 for the company. Not only did it split from longtime partner McKesson Corporation (NYSE: MCK) in March, it reported four transactions over the year, according to search results in our Healthcare Deal Database, including a $208 million acquisition for PDX, Inc. in June and a $212 million purchase of eRx Network, LLC in May.
The addition of Change Healthcare for Optum will most likely synergize with Vivify Health, which Optum purchased in October 2019, and PatientsLikeMe, the world’s largest personalized health network, acquired back in June 2019. Vivify Health is the developer behind a mobile, cloud-based platform that offers remote care management services. All three companies will support UnitedHealth’s growing digital health business.
