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January 07, 2021 at 09:39 AM
UnitedHealth Group Inc. has agreed to acquire Change Healthcare Inc., a medical billing and health care price information services company, for about $8 billion in cash.
(Related: UnitedHealth Sees Health Care Use Springing Back Up)
UnitedHealth has also agreed to assume about $5 billion Change Healthcare debt.
The companies said they hope to close on the deal sometime between July 1 and Dec. 31.
The Companies
UnitedHealth is a Minnetonka, Minnesota-based health insurance and health care data analysis giant that provides or administers health coverage for 48 million people, including 43 million people in the United States.
Change Healthcare is a Nashville, Tennessee-based company that offers health care providers financial analysis and management systems along with billing and collections services.
Emdeon, a health care provider technology company that was once part of WebMD Corp., and later was owned by The Blackstone Group, acquired Change Healthcare, a patient technology firm, in 2015. Emdeon took Change Healthcare’s name.
McKesson Corp., a medical supply company, formed a joint venture with Change Healthcare in 2016. The joint venture ended up controlling a business that included Change Healthcare’s operations and some of McKesson’s technology operations.
The McKesson-Change Healthcare joint venture sold a stake in the Change Healthcare business to the public through an initial public offering (IPO) in June 2019. The IPO share price was $14.60 per share.
Change Healthcare’s stock trades on Nasdaq, under the symbol CHNG.
Blackstone still owns a 20% stake in the company, according to the UnitedHealth-Change Healthcare deal announcement.
Change Healthcare bought control of the company from the McKesson-Change Healthcare joint venture in March 2020.
Change Healthcare has a fiscal year that starts April 1. Its earnings report for the second quarter, which ended Sept. 30, 2020, shows a $43 million net loss for the quarter on $756 million in revenue.
The company reported $62 million in net interest expense for the quarter, on $5 billion in debt, and $4.1 billion of its $10 billion in assets was classified as goodwill. Goodwill is the difference between what a company has paid to acquire other companies and the apparent fair value of the acquired companies.
