UnitedHealth has agreed to acquire LHC Group in a deal worth approximately $5.4 billion.
Healthcare giant UnitedHealth announced earlier today that it has agreed to acquire LHC Group for $5.4 billion.
According to a Reuters report earlier today, the deal would be settled in cash and UnitedHealth's unit Optum will pay about $170 for each share of LHC Group. Thus, representing an 8.12% premium to the company's last closing price.
The deal is expected to close before the end of the year. UnitedHealth is known for running the largest healthcare insurance in the United States. It is now set to add LHC Group to its Optum Health business, which operates primary care clinics and surgery centers.
LHC is known across the United States for providing in-home health and hospice care to patients dealing with injuries, illnesses or chronic conditions. The healthcare company, which is headquartered in Lafayette, Louisiana, has more than 900 locations across 37 states in the US.
The deal is subject to regulatory approval and LHC Group shareholders will also need to approve the acquisition. The shares of LHC are up by nearly 6% during Tuesday’s pre-market trading session.
Over the past few years, health insurers and other major players in the industry have been pushing for home-based. The cry was further fueled by the Coronavirus pandemic and is now gaining a strong foothold across the United States.
The technology improvements recorded over the past few years have paved the way for more care to be provided to patients at home. Furthermore, patients believe home care is an excellent alternative to the rather expensive stays in hospitals or other healthcare centres.
The acquisition of LHC would allow UnitedHealth to expand its services in the home care sector. In 2021, UnitedHealth’s major rival and Medicare Advantage provider Humana spent nearly $6 billion to expand its home health business.