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UnitedHealth picks up DaVita Medical
Posted on Wednesday, 06 December 2017 14:55
Minnesota-based UnitedHealth, through its subsidiary, Optum, is buying kidney dialysis centre operator DaVita Medical from DaVita for USD 4.90 billion in cash.
Completion is expected in 2018, subject to customary closing conditions, including approvals from the relevant regulatory bodies.
DaVita plans to use the proceeds from the sale, which was rumoured last month, to repay debt and for significant stock repurchases in the one to two year period following the transaction.
Chief executive Kent Thiry also stated the vendor will “pursue other investments in health care services outside of kidney care”.
Financed with cash on hand, the deal will develop New York Stock Exchange-listed UnitedHealth’s network of clinics in order to improve outpatient care.
The target’s operations in California, Colorado, Florida, Nevada and Washington will become part of Optum’s strategic care delivery portfolio, expanding the acquiror’s market reach.
This is the second multi-billion dollar purchase the firm has announced so far this year; Zephyr, the M&A database published by Bureau van Dijk, shows the health insurer made a USD 2.30 billion tender offer for Surgical Care Affiliates in January.
With revenue of USD 83.60 billion reported for the 12 months ended 31st December 2016, Optum manages healthcare centres across the US, providing urgent, speciality, surgery and in-home care to patients.
It also develops and operates an online platform, granting users, including 35 different governments and 80.0 per cent of US hospitals, access to healthcare data and analytics.
This technology will also benefit New Mexico-headquartered DaVita Medical when it joins the OptumCare division; physicians can use the information to provide better care to the 1.70 million patients served each year.
According to Zephyr, there have been 2,868 deals targeting US data processing, hosting and related services providers so far this year.
Targets in 2017 include online conferencing platform developer West Corporation and online application intelligence software-as-service provider AppDynamics, in transactions valued at USD 5.10 billion and USD 3.70 billion, respectively.
© Zephus Ltd