UnitedHealth Group makes two jumbo buys for Optum: LHC Group home health for $5B, Refresh Mental Health

In two jumbo acquisitions that further diversify UnitedHealth Group (UHG)’s Optum into the hot sectors of home and mental health (and are bright spots of this so-far somewhat dim M&A year), UHG is acquiring LHC Group, a major home health and hospice provider, for $5.4 billion or $170 per share. After the buy closes in second half 2022, after the usual regulatory approvals, UHG will put LHC under Optum Health to integrate their services into their provider network and health plans, especially Medicare Advantage where home health utilization is part of value-based care and costs are increasingly scrutinized. LHG serves 960 locations in 37 states, with 30,000 employees and revenue of $2.2 billion last year. The management team based in Louisiana will be coming over to Optum Health. Interestingly, co-founders Keith and Ginger Myers will personally invest $10 million in UHG following the acquisition close. FierceHealthcareHealthcare DiveLHC release

Little noted–through LHC, Optum is acquiring Imperium Health, a good-sized ACO, population health, and management services company. It’s another fit as Optum is a major physician group owner, many of whom are also in ACOs. LHC acquired Imperium in 2018. According to their website, Imperium now manages 16 ACOs and is in partnership with a large ACO group. 

Also coming Optum’s way is Refresh Mental Health which owns and operates US mental health practices with specialized programs in psychiatry and substance abuse treatment. Optum is acquiring it from private equity firm Kelso & Company. Terms were not disclosed, but Kelso bought Refresh in December 2020 at a valuation of around $700 million with earnings of about $40 million. Refresh has 300 practice locations in 37 states. FierceHealthcare, AxiosPro (which broke and confirmed the story).

Meanwhile, UHG will be slugging it out this summer to convince a US District Court judge that their super-jumbo Change Healthcare acquisition isn’t anti-competitive in about a dozen ways, as the Department of Justice lawsuit maintains. TTA 23 March

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