Optum completes acquisition of LHC Group in a deal worth US$5.4 billion

USA — Health care provider Optum has completed its acquisition of LHC Group, a home health, hospice, and home- and community-based care provider for US$5.4 billion, in a deal aimed at further building out Optum’s value-based care capabilities.

The deal will also help LHC Group expand its mission to provide patient-centered care across the U.S.

As of February 22, LHC Group’s stock has been retired from public trading, and the merger is officially completed, with LHC Group becoming a wholly-owned subsidiary of Optum.

In the coming months, LHC Group will be integrated into Optum to build out a home-based care powerhouse.

LHC Group provides home health, hospice, and home- and community-based care in 37 states and the District of Columbia through its 30,000 employees.

The deal was first announced on March 29, 2022. UnitedHealth Group and Optum purchased LHC Group for US$170 per share.

The deal’s completion was not without complications, as the Federal Trade Commission (FTC) requested more information regarding the transaction on multiple occasions. However, the FTC ultimately did not challenge the deal.

Optum aims to use LHC Group’s network to build out its at-home capabilities, with UnitedHealth Group CEO Andrew Witty noting that the company expects the at-home capabilities to generate a significant portion of its value-based care growth next year.

With LHC Group becoming a part of Optum, the public market will have one less independent home health company.

The remaining standalone, publicly traded companies include Amedisys Inc. and Enhabit Inc., which is in its first year on the market.

Other companies in this category include Aveanna Healthcare Holdings, previously a pediatric-specialized provider, Pennant Group Inc., which has a senior living portfolio, and Addus HomeCare Corporation, though the majority of its revenue comes from Medicaid-based home care services.

In other news, Amazon has completed its purchase of One Medical parent 1Life Healthcare, sealing the US$3.49bn acquisition.

The deal gives the e-commerce giant a network of primary-care doctors, Amazon’s biggest move to date into the healthcare industry.

Meanwhile, the healthcare provider operates more than 200 medical offices in 26 markets in the US. Customers pay a subscription fee for access to its physicians and digital health services.

Amazon’s other health offerings include Amazon Pharmacy — developed from the assets of the pharmacy startup PillPack acquired in 2018 — and Amazon Clinic, a referral service that points patients to partner doctors for text-chat consultations for treatment of common, relatively mild maladies such as hair loss and acne.

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