Optum to Acquire Home Health, Hospice Provider Amedisys

June 26, 2023 - Amedisys has announced that it plans to combine with Optum to advance value-based care for its patients.

The announcement ends the bidding war that ensued this month when Optum made a surprise announcement that it submitted an all-cash proposal of $3.26 billion to acquire the home health, hospice, and high-acuity care provider.

The previous month, Option Care Health, Inc. made a bid at the company of approximately $3.6 billion, including the assumption of net debt. The home infusion services company remained optimistic about its proposal to acquire Amedisys, but it confirmed the termination of its merger agreement today.

"While we are disappointed in this outcome, Option Care Health has a long track record of delivering value for our shareholders," John C. Rademacher, president and CEO of Option Care Health, said in an announcement. "We take a disciplined approach to acquisitions and, as we evaluated our options, we applied this discipline to ensure we continue to create value for all of our key stakeholders."

As part of the mutual termination agreement, Option Health Care will receive $106 million.

However, Amedisys is now setting sights on the Optum acquisition, which calls for the purchase of its outstanding common stock for $101 per share. Although, the deal is subject to approvals from the company’s shareholders and federal and state regulators.

"The combination of Amedisys with Optum unites two organizations dedicated to providing compassionate, value-based comprehensive care to patients and their families," Amedisys said in the announcement earlier today.

Optum Makes $3B Grab at Home Health Provider Amedisys

Optum has submitted an all-cash proposal to the tune of $3.26 billion to combine with home health, hospice, and high-acuity care provider Amedisys.

The health services company owned by UnitedHealth Group announced today that it seeks to combine with Amedisys in an effort to advance value-based care through the $100 per share all-cash transaction.

"Amedisys’ commitment to quality and care innovation within the home, and the patient-first culture of its people, combined with Optum’s deep value-based care expertise can drive meaningful improvement in the health outcomes and experiences of more patients at lower costs, leading to continued growth,” Patrick Conway, MD, CEO of Optum Care Solutions, said in the announcement.

Interest in home-based care has been increasing with older Americans’ desire to age in place. Then, the COVID-19 pandemic accelerated the move to home healthcare as patients sought to get medical care in the safety of their own homes.

Just last month, Option Care Health, Inc. offered to merge with Amedisys in an all-stock transaction that values Amedisys at approximately $3.6 billion, including the assumption of net debt. Following Optum’s surprise announcement today, Option Care Health reiterated the near- and long-term value opportunities of its proposal, including more than $500 million in annual cash flow by 2025 and over $9 billion in combined revenue by 2027.

"Option Care Health's previously announced definitive merger agreement with Amedisys delivers significant value to Amedisys and Option Care Health stockholders, a high degree of certainty in obtaining the required regulatory approvals due to the complementary nature of the parties' businesses, and benefits patients, providers, payers, and care teams,” the company said today.

“Our compelling all-stock transaction, expected to close in the second half of 2023, allows stockholders of both companies to participate in the upside of the combined company, which will be a differentiated leader in home health and alternate site care with unmatched scale and a unique cash flow profile,” the statement continued.

Optum’s proposed transaction represents a 26 percent premium over Amedisys’ most recent closing share price and a premium of 29 percent to the unaffected Amedisys share price of $77.26. The proposal also has no financing contingency or condition and does not require shareholder approval.

If accepted by Amedisys’ board of directors, the deal would expand Optum’s presence in the home health space.

Thousands of organizations provide in-home care nationwide, with no single participant in the market having more than a single-digit percentage share, according to Optum, which believes this will help it secure approval for the combination with Amedisys.

“Even with the numerous providers, demand for in-home care far exceeds available supply, creating the need for substantial investment in the sector to more fully serve patients and their families with compassionate, high quality care in the comfort of their own homes,” Optum stated in the announcement.

The original version of this article was published on June 5, 2023.