The $5.4 billion transaction between UnitedHealth Group (NYSE: UNH), its subsidiary Optum and home health giant LHC Group (Nasdaq: LHCG) has closed.
In filings with the U.S. Securities and Exchange Commission (SEC) Wednesday, LHC Group stated that its stock would be retired from public trading as of Feb. 22. In another filing, the company confirmed that the merger was officially completed, with LHC Group becoming a wholly owned subsidiary of UnitedHealth Group’s Optum.
“In accordance with the terms of the Merger Agreement, at the Effective Time, Merger Sub merged with and into the Company, with the Company surviving the Merger as a wholly-owned subsidiary of Parent,” the filing stated.
In the coming months, LHC Group – one of the largest home health providers in the country – will be integrated into Optum, UnitedHealth Group’s health care services arm.
The deal was first announced on March 29, 2022. UnitedHealth Group and Optum purchased LHC Group for $170 per share.
As of Wednesday morning, neither company has issued an announcement about their transaction being finalized.
“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,” Keith Myers, LHC Group’s chairman and CEO, said when the deal was first announced. “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 Lafayette, Louisiana-based LHC Group provides home health, hospice and home- and community-based care in 37 states and the District of Columbia via its 30,000 employees. In addition to its 527 home health locations, the company has more than 400 hospital partnerships.
The company was originally started by Myers and his wife, Ginger, as a single-location home health agency in 1994. After years of expansion, the company reorganized and became Louisiana Healthcare Group Inc., and then, in 2001, became a subsidiary of The Healthcare Group. In 2005, The Healthcare Group merged with LHC Group. Its first official day as a publicly traded stock was June 10, 2005.
Now, LHC Group will join one of the largest health care providers in the country to further build out a home-based care powerhouse at Optum.
The deal’s completion didn’t go through without hiccups. Ultimately, the Federal Trade Commission (FTC) did not opt to challenge the deal, but it did request for more information regarding the transaction on multiple occasions. The second was specifically related to worker pay in the home health care sector.
Last month, there was a report that suggested the deal was going to be reviewed again for vertical harm theory, but that did not come to fruition.
Optum’s goal moving forward is to leverage LHC Group’s network to further build out its value-based care capabilities.
“It’s not just about the clinics; it’s now about the home and the community,” UnitedHealth Group CEO Andrew Witty said during the company’s most recent investor conference.
In that vein, UnitedHealth Group has certainly put its money where its mouth is.
“You can expect the at-home capabilities … to generate a significant portion of our value-based care growth next year,” Dirk McMahon, the president and COO of UnitedHealth Group, also said at the investor conference.
Moving forward, LHC Group embedding itself into Optum means there will be one less independent home health company on the public market.
Among the standalone, publicly traded companies left are Amedisys Inc. (Nasdaq: AMED) and Enhabit Inc. (NYSE: EHAB), the latter of which is still in its first year on the market.
Others include Aveanna Healthcare Holdings (Nasdaq: AVAH) – formerly a pediatric-specialized provider – and Pennant Group Inc. (Nasdaq: PNTG), which also has a senior living portfolio. Addus HomeCare Corporation (Nasdaq: ADUS) also remains, though it generates the majority of its revenue from Medicaid-based home care services.
“LHC Group’s history of high-quality home and community-based care, matched with Optum’s extensive value-based care experience and resources, will accelerate Optum’s ability to deliver compassionate, high-touch, integrated care,” the SEC filing continued. “As demand for care in the home increases, this combination will help elevate the health care experience for the people Optum and LHC Group serve, prioritizing quality and seamless coordination that reduces fragmentation and complexity.”
This is a developing story. Please check back later for updates.
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