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UnitedHealth (UNH) Unit Eyes $1.5B EMIS Acquisition in UK
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UnitedHealth Group Incorporated’s (UNH - Free Report) UK affiliate Bordeaux UK Holdings II Limited recently agreed to acquire EMIS Group Plc. Bordeaux UK Holdings, which is part of UNH’s Optum business in the country, intends to acquire the health technology provider for £1.24 billion ($1.5 billion) in an all-cash deal.
The UNH unit expects to pay 1,925 pence for every EMIS share, reflecting a 49% premium to the acquiree’s closing price on Jun 16, 2022. UnitedHealth’s Optum business has been operating in the United Kingdom for two decades and the acquisition is expected to boost its footprint in the country. It supports the state-run National Health Service. The buyout of the healthcare software and systems provider will likely enable Optum to provide better services.
UnitedHealth’s health service business, branded as Optum, is becoming increasingly valuable. It is also crucial to UNH’s diversification strategy. From 2017 to 2021, the segment’s compounded revenues and earnings witnessed a CAGR of 14.3%.
Several acquisitions made under this segment, use of advanced technology, market-leading health analytics, modern care delivery and data-driven population health approaches lend Optum a long runway for growth. Each subsegment is expected to deliver a solid performance, driving the overall segment’s growth in turn.
The Optum unit has a strong inorganic growth strategy in place. This year, it acquired Refresh Mental Health. It also agreed to merge with the in-home health services provider LHC Group for a total deal value of $5.4 billion. The UNH unit is currently pursuing the proposed Change Healthcare Inc. takeover, which is seeing pushbacks from the U.S. regulators.
UnitedHealth is one of the few companies in the health care space with an expanding overseas business. UNH’s global business is now witnessing a recovery in membership and revenue figures. This improvement is expected to continue in the coming days as well.
Price Performance
The stock has rallied 13.6% in the past year, outperforming the industry’s 10.7% rise.
The Zacks Consensus Estimate for Select Medical’s earnings is currently pegged at $2.19 per share. SEM has witnessed one upward estimate revision in the past 60 days against none in the opposite direction.
Select Medical’s earnings beat estimates in each of the last four quarters, the average being 42%.
The Zacks Consensus Estimate for Progyny’s 2022 bottom line has improved 4.5 times in the past 60 days. PGNY has witnessed three upward estimate revisions during the same time period against none in the opposite direction.
Progyny’s earnings beat estimates in each of the last four quarters, the average being 169.7%.
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UnitedHealth (UNH) Unit Eyes $1.5B EMIS Acquisition in UK
UnitedHealth Group Incorporated’s (UNH - Free Report) UK affiliate Bordeaux UK Holdings II Limited recently agreed to acquire EMIS Group Plc. Bordeaux UK Holdings, which is part of UNH’s Optum business in the country, intends to acquire the health technology provider for £1.24 billion ($1.5 billion) in an all-cash deal.
The UNH unit expects to pay 1,925 pence for every EMIS share, reflecting a 49% premium to the acquiree’s closing price on Jun 16, 2022. UnitedHealth’s Optum business has been operating in the United Kingdom for two decades and the acquisition is expected to boost its footprint in the country. It supports the state-run National Health Service. The buyout of the healthcare software and systems provider will likely enable Optum to provide better services.
UnitedHealth’s health service business, branded as Optum, is becoming increasingly valuable. It is also crucial to UNH’s diversification strategy. From 2017 to 2021, the segment’s compounded revenues and earnings witnessed a CAGR of 14.3%.
Several acquisitions made under this segment, use of advanced technology, market-leading health analytics, modern care delivery and data-driven population health approaches lend Optum a long runway for growth. Each subsegment is expected to deliver a solid performance, driving the overall segment’s growth in turn.
The Optum unit has a strong inorganic growth strategy in place. This year, it acquired Refresh Mental Health. It also agreed to merge with the in-home health services provider LHC Group for a total deal value of $5.4 billion. The UNH unit is currently pursuing the proposed Change Healthcare Inc. takeover, which is seeing pushbacks from the U.S. regulators.
UnitedHealth is one of the few companies in the health care space with an expanding overseas business. UNH’s global business is now witnessing a recovery in membership and revenue figures. This improvement is expected to continue in the coming days as well.
Price Performance
The stock has rallied 13.6% in the past year, outperforming the industry’s 10.7% rise.
Image Source: Zacks Investment Research
Zacks Rank & Other Key Picks
UnitedHealth currently has a Zacks Rank #2 (Buy). Some other top-ranked stocks in the medical space are Select Medical Holdings Corporation (SEM - Free Report) and Progyny, Inc. (PGNY - Free Report) , each carrying a Zacks Rank of 2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Select Medical’s earnings is currently pegged at $2.19 per share. SEM has witnessed one upward estimate revision in the past 60 days against none in the opposite direction.
Select Medical’s earnings beat estimates in each of the last four quarters, the average being 42%.
The Zacks Consensus Estimate for Progyny’s 2022 bottom line has improved 4.5 times in the past 60 days. PGNY has witnessed three upward estimate revisions during the same time period against none in the opposite direction.
Progyny’s earnings beat estimates in each of the last four quarters, the average being 169.7%.