OptumInsight and Change Healthcare combine in $8bn deal

March 2021 | DEALFRONT | MERGERS & ACQUISITIONS

Financier Worldwide Magazine

March 2021 Issue

In an £8bn transaction that seeks to improve outcomes and experiences and lower the cost of healthcare, diversified health services company OptumInsight – part of UnitedHealth Group – is to merge with healthcare technology solutions provider Change Healthcare.

Under the terms of the agreement, Change Healthcare’s common stock will be acquired for $25.75 per share in cash, with private equity funds affiliated with The Blackstone Group, which owns approximately 20 percent of the common stock of Change Healthcare, having agreed to vote the shares they control in favour of the merger.

Furthermore, the combination 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, advancing strongly in subsequent years, inclusive of investments to accelerate technology, system and product integration and development activities.

Uniting two technology and service companies focused on serving healthcare, Change Healthcare brings key technologies, connections and advanced clinical decision, administrative and financial support capabilities, enabling better workflow and transactional connectivity across the healthcare system.

For its part, OptumInsight brings modern analytics, comprehensive clinical expertise, innovative technologies and extensive experience in improving operational and clinical performance. Its 190,000 people worldwide deliver intelligent, integrated solutions that help modernise the health system and improve overall population health.

Additionally, Change Healthcare’s payment capacities, combined with OptumInsight’s highly automated payment network, will also simplify financial interactions among care providers, payers and consumers and accelerate the movement to a more modern, real-time and transparent payment system. This will ensure physicians get paid more quickly, accurately and reliably, and provide consumers the same simplicity and convenience managing their healthcare finances they experience with other transactions.

“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 chief executive of Change Healthcare. “We share with Optum a common mission and values and importantly, a sense of urgency to provide our customers and those they serve with the more robust capacities this union makes possible.”

Upon closing of the transaction, Mr de Crescenzo will serve as OptumInsight’s chief executive, leading the combined organisation.

“Change Healthcare has made significant progress executing its strategic objectives, including advancing innovation, accelerating growth and improving the effectiveness of the US health system,” said Howard Lance, chairman of Change Healthcare. “We are delighted to have in Optum a partner that shares a common vision of creating a better future for health care for the people and communities we serve and see this combination as in the best interests of all of our stakeholders.”

The merger is expected to close in the second half of 2021, subject to the approval of Change Healthcare’s shareholders, as well as regulatory approvals and other customary closing conditions.

“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,” said Andrew Witty, president of UnitedHealth Group and chief executive of OptumInsight. “We are thrilled to welcome Change Healthcare’s highly skilled team to create a better future for healthcare.”

Fraser Tennant