UnitedHealth will pay $25.75 a share in cash, the companies said in a joint statement, a 41% premium over Change Healthcare’s closing price Tuesday of $18.24. The $13 billion valuation includes more than $5 billion in debt owed by Change Healthcare.
Shares of Change Healthcare were up 35.86% at $24.78 in premarket trading on Wednesday. UnitedHealth shares were down 1.62% at $339.20.
The deal will combine Change Healthcare with UnitedHealth’s OptumInsight unit to offer software, data analytics, technology and other services to the health care industry, the companies said, adding that the combination will help simplify services around medical care to improve health outcomes and lower costs.
“Together we will help streamline and inform the vital clinical, administrative and payment processes on which health care providers and payers depend to serve patients,” Andrew Witty, president of UnitedHealth Group and CEO of Optum, said in a statement.
The deal is expected to close in the second half of 2021. Private-equity funds affiliated with Blackstone Group that own about 20% of Change Healthcare’s common stock have agreed to vote in favor of the deal, which is expected to boost UnitedHealth’s adjusted per-share earnings by 50 cents in 2022, the companies said.
The acquisition is the second major healthcare deal in the first week of 2021. Centene (CNC) – Get Report on Monday announced that it has agreed to buy Magellan Health (MGLN) – Get Report in a $2.2 billion tie-up.