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UnitedHealth´s Optum to Acquire DaVita Medical Group for USD 4.9bn in Cash
Wednesday 06 December 2017

6 December 2017 - US-based health insurer UnitedHealth Group's (NYSE: UNH) Optum health services business is acquiring US-based medical group operator DaVita Medical Group from US-based DaVita Inc. (NYSE: DVA), the companies said on Wednesday.

The agreement, entered into on December 5, 2017, calls for Optum to acquire DaVita Medical Group for approximately USD 4.9bn in cash.

This transaction is expected to close in 2018 and is subject to regulatory approval and other customary closing conditions.

DaVita Medical Group will join with Optum's physician-led primary, specialty, in-home, urgent- and surgery-care delivery services business.

Optum's data, analytics, technologies and clinical expertise will help DaVita Medical Group physicians deliver higher quality care more effectively to the patients they serve.

With medical groups in California, Colorado, Florida, Nevada, New Mexico and Washington, DaVita Medical Group will expand the market reach of Optum's strategic care delivery portfolio, including Surgical Care Affiliates, MedExpress and HouseCalls. Patients will further benefit from the sharing of best practices across both organizations.

DaVita Medical Group serves approximately 1.7m patients per year through nearly 300 medical clinics featuring primary and specialist care. DaVita Medical Group also operates 35 urgent-care centers and six outpatient surgery centers.

Following the transaction, DaVita Medical Group will become part of Optum's OptumCare division, which TODAY works with more than 80 health plans to serve ms of consumers annually through 30,000 affiliated physicians and hundreds of care facilities.

Joe Mello, chief operating officer of DaVita Medical Group, will continue in a leadership role in the combined entity, as will the DaVita Medical Group leadership team.

DaVita plans to use the proceeds from the transaction for significant stock repurchases over the one to two years following the closing of the transaction, as well as to repay debt and for general corporate purposes.

DaVita Inc is the parent company of DaVita Kidney Care and DaVita Medical Group. DaVita Kidney Care is a provider of kidney care in the United States, delivering dialysis services to patients with chronic kidney failure and end-stage renal disease.

As of September 30, 2017, DaVita Kidney Care operated or provided administrative services at 2,470 outpatient dialysis centers located in the United States serving approximately 218,200 patients.

The company also operated 230 outpatient dialysis centers located in 11 countries outside the United States.

DaVita Medical Group manages and operates medical groups and affiliated physician networks in California, Colorado, Florida, Nevada, New Mexico, and Washington. DaVita Medical Group's teammates, employed clinicians and affiliated clinicians provided care for approximately 1.7m patients.

Optum is an information and technology-enabled health services business. It is is part of UnitedHealth Group (NYSE: UNH).
Details
Date Published: 06/12/2017
Target: DaVita Medical Group
Country: USA
Deal Size: 4.9bn (USD)
Sector: Healthcare
Type: Corporate acquisition
Financing: Cash
Status: Agreed
Vendor: DaVita Inc
Buyer: Optum health
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