UnitedHealth outbids Option Care for home-health provider Amedisys

(Bloomberg) –UnitedHealth Group Inc. agreed to buy home-health provider Amedisys Inc. for $101 a share in cash, outbidding earlier suitor Option Care Health Inc. 

The deal, announced Monday in a filing, concludes a competition between UnitedHealth and Option Care, which earlier agreed to buy Amedisys for about $97.38 a share, including debt. Option Care received a $106 million termination fee, the company said in a filing.

The deal values Amedisys at about $3.29 billion, based on the company’s share count. Shares of Amedisys were little changed at the US market open. Shares of Option Care rose 3.2% at 9:48 a.m. in New York. UnitedHealth shares fell less than 1%.

The combination shows the rising interest in home-health and hospice care providers as the US population ages and insurance companies and government programs push to care for patients in lower-cost settings. At-home care is a key part of that strategy, with more intense medical care available outside of hospitals and nursing homes.

Baton-Rouge, Louisiana-based Amedisys has  522 care centers in 37 states and serves more than 455,000 patients a year, according to a company filing. About three-quarters of the company’s revenue comes from Medicare. UnitedHealth’s insurance division is the largest seller of private Medicare plans.

The purchase of Amedisys follows UnitedHealth’s acquisition of another company in the space, LHC Group, in February, and a combination with data provider Change Healthcare in October. 

The deal may raise questions for antitrust regulators. The US Department of Justice unsuccessfully challenged UnitedHealth’s acquisition of Change, and regulators have increasingly questioned the vertical integration of large health-care enterprises. UnitedHealth expanded further into care delivery than any if its peers. Amedisys will become part of UnitedHealth’s Optum health services unit.