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UnitedHealth (UNH), Amedisys Clear Merger Hurdle With Asset Sale
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UnitedHealth Group Incorporated (UNH - Free Report) and Amedisys, Inc.’s (AMED - Free Report) $3.3 billion merger is set to close in the second half of 2024, with Amedisys becoming a wholly-owned subsidiary of UnitedHealth. Both companies are divesting certain care centers to VitalCaring Group’s affiliate VCG Luna, to satisfy federal antitrust regulators.
This move, announced recently by Amedisys in a filing with the U.S. Securities & Exchange Commission, is expected to streamline the merger process and maintain compliance with regulatory requirements.
By selling these assets, the companies aim to avoid potential monopoly issues and ensure a smoother merger process. As stated in the filing, the finalization of the divestment agreement hinges on the successful completion of the UnitedHealth deal.
Further financial details of the move are yet to be disclosed. UNH business Optum submitted a full-cash proposal to combine with Amedisys in June 2023. Optum’s expertise in value-based care and Amedisys’ care and quality innovation within the home were expected to drive better health outcomes at lower costs and improve patient care continuity.
Optum has made some significant acquisitions over the years to strengthen its market position and boost its capabilities. In February 2023, it closed a massive $5.4 billion acquisition of LHC Group.
The Optum business is crucial for the company’s diversification strategy. The technology-enabled health services business contributed more than 24% of UNH’s revenues in 2023. The unit is on track to achieve 5 million patients served in value-based care by 2024-end.
Price Performance
UnitedHealth shares have gained 6.6% in the past year compared with the industry’s 5.3% growth.
Image Source: Zacks Investment Research
Zacks Rank & Key Picks
UnitedHealth currently has a Zacks Rank #3 (Hold).
The Zacks Consensus Estimate for Elevance Health’s current-year earnings implies a 12.4% increase from the year-ago reported figure. ELV beat earnings estimates in each of the last four quarters, with an average surprise of 2.8%. The consensus mark for its current-year revenues is pegged at $171.8 billion, which indicates a 0.9% year-over-year increase.
The Zacks Consensus Estimate for Aura Biosciences’ current-year earnings suggests a 6.7% year-over-year improvement. It has witnessed two upward estimate revisions over the past 60 days against no movement in the opposite direction. AURA beat earnings estimates in three of the past four quarters and missed once, with an average surprise of 1.6%.
Image: Bigstock
UnitedHealth (UNH), Amedisys Clear Merger Hurdle With Asset Sale
UnitedHealth Group Incorporated (UNH - Free Report) and Amedisys, Inc.’s (AMED - Free Report) $3.3 billion merger is set to close in the second half of 2024, with Amedisys becoming a wholly-owned subsidiary of UnitedHealth. Both companies are divesting certain care centers to VitalCaring Group’s affiliate VCG Luna, to satisfy federal antitrust regulators.
This move, announced recently by Amedisys in a filing with the U.S. Securities & Exchange Commission, is expected to streamline the merger process and maintain compliance with regulatory requirements.
By selling these assets, the companies aim to avoid potential monopoly issues and ensure a smoother merger process. As stated in the filing, the finalization of the divestment agreement hinges on the successful completion of the UnitedHealth deal.
Further financial details of the move are yet to be disclosed. UNH business Optum submitted a full-cash proposal to combine with Amedisys in June 2023. Optum’s expertise in value-based care and Amedisys’ care and quality innovation within the home were expected to drive better health outcomes at lower costs and improve patient care continuity.
Optum has made some significant acquisitions over the years to strengthen its market position and boost its capabilities. In February 2023, it closed a massive $5.4 billion acquisition of LHC Group.
The Optum business is crucial for the company’s diversification strategy. The technology-enabled health services business contributed more than 24% of UNH’s revenues in 2023. The unit is on track to achieve 5 million patients served in value-based care by 2024-end.
Price Performance
UnitedHealth shares have gained 6.6% in the past year compared with the industry’s 5.3% growth.
Image Source: Zacks Investment Research
Zacks Rank & Key Picks
UnitedHealth currently has a Zacks Rank #3 (Hold).
Investors interested in the broader Medical space may look at some better-ranked players like Elevance Health, Inc. (ELV - Free Report) and Aura Biosciences, Inc. (AURA - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Elevance Health’s current-year earnings implies a 12.4% increase from the year-ago reported figure. ELV beat earnings estimates in each of the last four quarters, with an average surprise of 2.8%. The consensus mark for its current-year revenues is pegged at $171.8 billion, which indicates a 0.9% year-over-year increase.
The Zacks Consensus Estimate for Aura Biosciences’ current-year earnings suggests a 6.7% year-over-year improvement. It has witnessed two upward estimate revisions over the past 60 days against no movement in the opposite direction. AURA beat earnings estimates in three of the past four quarters and missed once, with an average surprise of 1.6%.