UnitedHealth, Amedisys reach new deal to sell home health and hospice locations if merger approved
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Dive Brief:
Amedisys and UnitedHealth have inked a new deal to sell some home care and hospice centers as the companies work to get their merger over the finish line.
The firms have agreed to divest centers to Louisville, Kentucky-based BrightSpring Health Services and Eagle, Idaho-based Pennant Group, Amedisys said in a securities filing last week. Financial terms weren't disclosed, but Pennant said the price for its purchase was $102.5 million in its own filing.
The sales are contingent on the closure of UnitedHealth's acquisition of Amedisys, which has been held up by regulators over anticompetitive concerns. Last month, a judge scheduled the companies to go into mediation with the Department of Justice on Aug. 18.
Dive Insight:
UnitedHealth's health services unit Optum notched the $3.3 billion deal to acquire Amedisys in summer 2023, beating out Option Care Health to buy the Baton Rogue, Louisiana home care provider.
But the deal faced a setback late last year when the DOJ sued to block the acquisition, arguing the purchase would allow UnitedHealth to control 30% or more of the home health or hospice market in eight states. The regulator noted the healthcare giant had already acquired Amedisys' competitor LHC Group in 2023.
In a bid to appease regulators, UnitedHealth and Amedisys, which deny the DOJ's claims that the merger would negatively impact patients, have moved to divest assets.
Last summer, the companies said they would sell some medical centers to VCG Luna, a subsidiary of Texas home health and hospice company VitalCaring Group. However, that deal was scrapped in January, according to a securities filing.
Now, the firms are again looking to divest home health and hospice assets, this time to Pennant and BrightSpring.
Pennant provides home health and hospice services through more than 120 affiliated agencies, operating in 13 mostly Western states.
A Pennant spokesperson said the firm would complete its deal shortly after the UnitedHealth and Amedisys merger closes, though the company can't predict when that could happen.
Meanwhile, BrightSpring, which went public early last year, runs home care and pharmacy services in all 50 states. The firm is also fairly acquisitive, completing eight purchases in its provider and pharmacy segments last year, according to a securities filing.
During an earnings call last week, BrightSpring CEO Jon Rousseau said the latest purchase is 'very in line with our acquisition philosophy' and the company has 'essentially no geographical overlap' with the locations in the deal.
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