UnitedHealth Group Inc’s (NYSE:UNH) Optum unit has announced plans to buy Surgical Care Affiliates Inc (NASDAQ:SCAI) for $2.30 billion, in a deal that is expected to close in the first half of 2017.
UnitedHealth is one of the United States’ largest and most diverse health insurance companies. A merger between the companies will create a comprehensive ambulatory care services platform, which will include surgical care, primary care and urgent care and will work alongside over 80 health plans across the US.
UnitedHealth, whose annual revenues last year were around $180 billion, hope the acquisition will help transform the insurers into a more diversified health services company.
Surgical Care chairman and CEO Andrew Hayek said in a statement: “Joining with OptumCare will enable us to better support and empower independent physicians, helping them provide high-quality care for their patients while making health care more affordable,”
The company says it has 20,000 affiliated physicians and it plans to combine the surgery centres with those businesses.
“Combining SCA and OptumCare will enable us to continue the transition to high-quality, high-value ambulatory surgical care, partnering with the full range of health systems, medical groups and health plans,” said Larry C. Renfro, vice chairman of UnitedHealth Group and the chief executive of Optum.
The fixed offer of $57 per share represents a premium of 17 percent to Friday’s close. The deal will be funded between 51 to 80 percent with UnitedHealth, with the remainder in cash. The private-equity firm TPG, which owns 30 percent of the target, has agreed to tender its stock.
UnitedHealth have said that the acquisition will probably have no effect of their outlook for adjusted new earnings per share this year, but will boost them in throughout 2018.
Shares of Minnetonka, the Minnesota-based UnitedHealth, rose 36 percent in 2016, making it one of the best performers in the Dow Jones Industrial Average during a difficult year for other health stocks.