Optum Acquires Change Healthcare for $13 Billion

UnitedHealth Group‘s Optum has agreed to acquire Change Healthcare, a healthcare revenue cycle management solution provider.

Optum will pay about $8 billion in cash for the company and acquire about $5 billion of Change Healthcare debt, for a total valuation of $13 billion. The acquisition will strengthen the insurer’s portfolio of healthcare technology services and capabilities.

In recent years, UnitedHealth has expanded its reach well beyond health insurance. Through its Optum division, the company increasingly delivers medical care directly to patients and sells consulting, technology, and data to other healthcare entities.

Recently, Change Healthcare sold its Connected Analytics business to Kaufman, Hall & Associates, a provider of enterprise financial planning software and consulting solutions for $55 million. HealthStream, a provider of workforce and provider solutions for the healthcare industry, has entered into a definitive agreement to acquire Change Healthcare’s staff scheduling business, including ANSOS Staff Scheduling (ANSOS) application and related products, for approximately $67.5 million in cash.

“Together we will help streamline and inform the vital clinical, administrative, and payment processes on which health care providers and payers depend to serve patients,” said Andrew Witty, President of UnitedHealth Group and CEO of Optum. “We’re thrilled to welcome Change Healthcare’s highly skilled team to create a better future for health care.”

“This opportunity is about advancing connectivity and accelerating innovations and efficiencies essential to a simpler, more intelligent, and adaptive health system.”

“We share with Optum a common mission and values and, importantly, a sense of urgency to provide our customers and those they serve with the more robust capacities this union makes possible,” said Neil de Crescenzo, President and CEO of Change Healthcare.

Upon closing, Mr. de Crescenzo will serve as OptumInsight’s chief executive officer, leading the combined organization.

A total of 184 digital health M&A transactions in 2020 compared to 169 in 2019, a 9% increase in deal activity, according to the latest Mercom Digital Health Funding & M&A report.