Change Healthcare acquired for $13 billion by UnitedHealth Group's OptumInsight

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Change Healthcare acquired for $13 billion by UnitedHealth Group's OptumInsight

by John R. Fischer, Senior Reporter | January 07, 2021
Business Affairs
UnitedHealth Group's OptumInsight will acquire Change Healthcare for $13 billion
OptumInsight, a health services company under UnitedHealth Group, will acquire Change Healthcare for $13 billion.

Optum will pay $25.75 per share of Change Healthcare’s common stock in cash, adding up to $8 billion, plus more than $5 billion it owes in debts. The combination enables OptumInsight to offer software, data analytics and technologies that will enhance workflow and simplify transactions across healthcare systems.

“Together we will help streamline and inform the vital clinical, administrative and payment processes on which healthcare providers and payers depend to serve patients,” said Andrew Witty, president of UnitedHealth Group and CEO of Optum, in a statement.

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Change Healthcare’s technology integrates evidence-based clinical criteria directly into clinician workflow, while Optum’s clinical analytics expertise and Individual Health Record enhance evidence that supports clinician decision-making at the point-of-care. Together, both companies expect to help clinicians make informed decisions faster and easier that ensure quality care at affordable pricing.

They also plan to reduce complex administrative tasks by integrating Optum’s advanced data analytics with Change Healthcare’s intelligent healthcare network. This will add insights drawn from billions of claim transactions to allow for faster, more informed and accurate services and processing. In addition, the two will combine Optum’s automated payment network with Change Healthcare’s payment capacities. This not only creates a more modern and transparent payment system operating in real time, but ensures physicians are paid quicker, accurately, and reliably, and that patients can manage their healthcare finances in a simpler manner.

“This opportunity is about advancing connectivity and accelerating innovations and efficiencies essential to a simpler, more intelligent and adaptive health system,” said Neil de Crescenzo, president and CEO of Change Healthcare, who, upon closing of the deal, will lead the combined organization as chief executive officer for OptumInsight.

OptumInsight racked up about $2.8 billion in revenue in its previous quarter ending Sept. 30, about 4% of the company’s total, while Change Healthcare raised a revenue of $756 million in the same period, according to Bloomberg.

The price paid per share is a 41% premium over Change Healthcare’s closing price Tuesday of $18.24, reported Bloomberg. The deal 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.

The acquisition is expected to be completed in the second half of 2021.

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