Dive Brief:
- Wednesday is the last day that LHC Group will trade on the Nasdaq, suggesting UnitedHealth will complete its acquistion of the home health business prior to market open on Thursday.
- LHC’s stock will be halted aftermarket on Wednesday, according to a Nasdaq notice. As a result, the merger is tentatively scheduled to close the next morning, subject to pending regulatory approvals.
- Speculation that the Federal Trade Commission will move to block the $5.4 billion deal has been rampant, but reports late last month suggest that regulators are unlikely to challenge the transaction.
Dive Insight:
Early last year, UnitedHealth announced it planned to acquire LHC in a bid to provide more integrated care. Originally, the companies expected the deal to close in the second half of 2022, But the FTC in June extended its period to challenge the acquisition by requesting additional data from the companies.
In December, LHC and UnitedHealth extended the termination date for the deal to March 28, and said they expected it to close in the first quarter.
LHC’s delisting, a sign that the deal’s close could be imminent, doesn’t come as a surprise. The company was notified by the Nasdaq on Jan. 6 that it wasn’t in compliance with the stock market’s listing qualifications, as it hadn’t held an annual meeting of shareholders in the past year, according to a filing with the Securities and Exchange Commission.
As M&A heats up in the healthcare sector, antitrust regulators have been taking an increasingly close look at transactions — including UnitedHealth’s.
The Minnesota-based healthcare giant, which owns the biggest private payer in the U.S., expected to close its $13 billion acquisition of data analytics firm Change Healthcare in early 2022, but the the Department of Justice halted the deal over anticompetitive concerns.
UnitedHealth eventually closed the deal in October after a judge ordered that the deal could go through. However, the DOJ announced in November that it was appealing the purchase, even as UnitedHealth works to integrate Change into its Optum health services business.
Louisiana-based LHC is a major player in the home health space, with more than 960 locations in 37 states and $2.2 billion in revenue last year.
Interest in home health has been skyrocketing as the U.S. faces an aging population, especially among insurers. When the deal was announced, analysts said that acquiring home health assets made sense for large Medicare Advantage payers, allowing them to track patients’ health conditions and coordinate in-home care.
MA is a growth area for UnitedHealth. The company expects to add between 600,000 and 650,000 MA enrollees in 2023, up 9% year over year, management said at its investor day in late November.
UnitedHealth plans to integrate LHC into Optum at the acquisition’s close.
