Home health company Amedisys said Monday it has agreed to be acquired by UnitedHealth Group’s Optum in an all-cash transaction for $101 per share, or an estimated $3.3 billion.
The bid is higher than Optum’s original offer in early June of $100 per share for the Baton Rouge, Louisiana-based company.
Home infusion company Option Care Health, which announced plans in early May to buy Amedisys for $3.6 billion in stock, said in a news release it ended its merger agreement with the company and will receive a $106 million termination fee.
“While we are disappointed in this outcome, Option Care Health has a long track record of delivering value for our shareholders,” President and CEO John C. Rademacher said in the release.
The transaction is subject to shareholder and regulatory approval. Under the terms of the agreement, Amedisys and UnitedHealth Group can terminate the deal if it is not completed within one year, or 18 months with an extension. Amedisys would pay UnitedHealth Group $125 million if it broke the deal to accept an offer from another company. UnitedHealth Group would pay Amedisys $144 million if the acquisition is blocked by regulators.
Optum’s acquisition of home health and hospice service provider LHC Group, which closed in February, was delayed for several months after the Federal Trade Commission requested additional information on the deal.
“Given the recent scrutiny of the LHC deal and amped-up antitrust scrutiny, in general, under the Biden administration, we would not be surprised to see significant regulatory scrutiny of this deal,” said Morningstar healthcare analyst Julie Utterback.
Optum’s all-cash deal creates less uncertainty around Amedisys’ value than Option Care’s all-stock bid, Utterback said.
While Option Care is out of the running for Amedisys, the home infusion company has indicated it would explore other merger and acquisition opportunities, said William Blair analyst Matt Larew in a Monday report.
The Optum-Amedisys deal follows a spate of acquisitions in the home health space over the past few years. In 2021, Humana bought the remaining 60% interest in Kindred at Home for a deal valued at $8.1 billion. Humana later folded Kindred into its CenterWell unit. In March, CVS Health completed its acquisition of tech-based home health platform Signify Health for $8 billion.