LHC Surges as UnitedHealth Snaps it Up to Expand Home-Care Business By Investing.com

By Dhirendra Tripathi

Investing.com – LHC Group (NASDAQ:) stock jumped 7.4% in premarket trading Tuesday after UnitedHealth (NYSE:) said its subsidiary Optum will buy the in-home health care services provider at $170 a share.

LHC stock closed at $157.23 Monday.

The deal values LHC at about $6 billion, including debt, The Wall Street Journal reported. The transaction is expected to close in the second half of 2022.

LHC co-founders Keith and Ginger Myers will personally invest $10 million in UnitedHealth Group stock following the close of the combination, UnitedHealth said in a release. The acquisition is expected to be neutral to UnitedHealth Group’s outlook for adjusted net earnings per share in 2022, modestly accretive in 2023, and advancing strongly in subsequent years.

Much of LHC’s home-health and hospice network is owned in partnerships with hospitals. The company claims to care for more than 500,000 patients annually.

The deal comes amid increasing demand for at-home care as patients shun nursing homes and seek lower-cost alternatives. It’s a trend accelerated by the pandemic. Players like UnitedHealth and rival Humana (NYSE:) are thus keen to push into that area.

Humana last year completed its acquisition of Kindred at Home, spending about $5.7 billion for the 60% share of the company.

UnitedHealth is currently locked in an antitrust battle with the Justice Department that’s blocking its acquisition of health-technology firm Change Healthcare (NASDAQ:). The authorities argue that UnitedHealth could use it to help its insurance unit to deal with competition.