UnitedHealth Group will spend nearly $8 billion in cash to add a health care technology company to its growing Optum business.
Minnetonka, Minnesota-based UnitedHealth brings in most of its revenue through a health insurance business that covers about 48 million people. But its Optum segment generates bigger profit margins and provides a growing portion of the company’s operating earnings.
That business runs surgery centers, clinics and one of the nation’s largest pharmacy benefit management operations. It also provides technology services and support through OptumInsight.
OptumInsight accounts for only about 3% of UnitedHealth’s revenue, but it also generates an operating profit margin of around 25%, Mizuho Securities analyst Ann Hynes said in a research note. She added that she views the Change deal positively.
It still needs approval from Change shareholders and regulators. Private equity funds tied to The Blackstone Group own a roughly 20% stake in the Nashville, Tennessee, company, and they have already voted in favor of the deal.
Copyright © 2021 The Washington Times, LLC.
View original post