UnitedHealth acquires LHC Group in $5.4 billion deal [The Advocate, Baton Rouge, La.]

Advocate, The (Baton Rouge, LA)

Mar. 29—UnitedHealth Group, the nation's largest health insurer, has acquired Lafayette-based LHC Group for $5.4 billion.

Optum Health, a national provider of in-home health services and part of UnitedHealth Group, and LHC Group announced the merger Tuesday morning in a move that involves the acquisition of the Lafayette company's outstanding common stock for $170 per share.

The merger will add one of the country's largest home-health firms to a portfolio that already includes doctor groups, clinics and surgery centers, as well as some home-based services, The Wall Street Journal reported.

The combined companies will form what would be the world's largest home health care company and be housed in LHC Group's Lafayette office.

LHC Group, which has 30,000 employees ranging from front-line care providers to administrative and support personnel across the country, provides 12 million annual in-home visits and is recognized for its quality in-home care. It has 964 locations in 37 states.

The company's leadership team will continue forward as part of Optum Health, the companies announced. Optum is the fast-growing division of the Minnesota-based UnitedHealth Group and works with over 100 health plans.

The deal represents "a nice strategic fit" for Optum, given the growth potential in home health care and UnitedHealth's Medicare Advantage coverage, Mizuho Securities USA analyst Ann Hynes said in a research note.

Health insurers and other payers have been emphasizing home-based care more in recent years, a trend fueled by the COVID-19 pandemic. They expect this type of care to remain popular as the U.S. population ages and more people become eligible for Medicare.

Health insurers also have been emphasizing more regular care for their customers in order to keep people healthy and out of hospitals.

The deal is expected to close in the coming months and is subject to LHC Group shareholder approval, regulatory approvals and other customary closing conditions.

LHC Group had about $2.2 billion in revenue last year, up from just over $2 billion in 2020 and 2019, reports indicate.

LHC Group co-founders Keith and Ginger Myers will personally invest $10 million in UnitedHealth Group stock after the deal is official.

"Since our founding in 1994, 'It's all about helping people' has been the core of our mission," Keith Myers said. "And as part of the Optum team and its value-based capabilities, we will be able to expand our patient-centered mission and help drive best care practices across the country.

"Working together as organizations committed to caring for the most vulnerable in society will help us more effectively and efficiently deliver high quality and increasingly value-based care in the home."

The move will enhance Optum's reach along the full continuum of care, including primary care, said CEO Dr. Wyatt Decker. He told The Wall Street Journal the move is part of an industry that "has really only just begun, of how much care can truly be delivered in the home," which is less costly than a hospital or nursing home.

"We greatly admire how the people of LHC Group have created a culture that enables them to be a trusted health care partner to patients and their families when they need it the most, and we look forward to working with and learning from them," Decker said.

Shares of LHC Group stock was trading at $168 at the close of market Tuesday, the highest value so far this year.

The company, which recently expanded its headquarters at 901 Hugh Wallis Drive, began in the St. Landry Parish town of Palmetto in 1994 when Myers and his wife, a nurse, volunteered to help local senior citizens who could no longer take care of themselves and had no one to help.

The Associated Press contributed to this report.

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