UnitedHealth Group Inc has agreed to buy the home-health firm LHC Group Inc for around $5.4 billion in cash, in the latest tie-up linking a managed care core company to a home health business.
The acquisition by UnitedHealth's Optum health-services arm announced that it will add one of the nation's largest home care companies to a portfolio that already includes physician teams, clinics and surgery centres, as well as some in-home services.
UnitedHealth would pay around $170 per share for LHC, which had around $2.2 billion in revenue last year and includes hospice, long-term care hospitals and other home-based services. The deal is valued at $6 billion including the debt and the acquisition is expected to close in the second half of 2022.
With the increase in demand for home health amid the Covid-19 pandemic, spending on home healthcare was estimated at $121.6 billion last year and is expected to grow to $226.4 billion by 2030, according to the Centers for Medicare and Medicaid Services.
The deal comes as UnitedHealth is facing an antitrust suit from the Justice Department aiming to block a previous acquisition, for health-technology firm Change Healthcare Inc. The company has said that the Change deal would bring down costs and improve service for customers, and disputed Justice Department's arguments.