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UnitedHealth Extends Expiration Date of SCA Share Exchange

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UnitedHealth Group Incorporated (UNH - Free Report) recently declared that the expiration of its previously announced exchange offer for all of the outstanding shares of Surgical Care Affiliates, Inc. (“SCA”) has been extended. The exchange offer will now expire on Mar 24, 2017 instead of Mar 21. All other terms and conditions remain unchanged.

Surgical Care, when combined with UnitedHealth’s primary and urgent care delivery services business OptumCare, is likely to act as an integrated ambulatory care services provider alongside maintaining its wide network of ASCs and surgical hospitals. The transaction will not only strengthen the successful ambulatory surgery center operations of the involved parties but also enhance OptumCare’s capabilities in outpatient surgical procedures.

The company has been growing through tuck-in acquisitions both nationally and globally. For Optum, the year 2016 was a distinguishing year for developing and deepening relationships across healthcare. It formed an alliance with Walgreens, forged technology partnership with Availity, collaborated with Quest diagnostics, bagged many important multi-year contracts from the Department of Veterans Affairs, partnered with Allscripts, inked a new deal with CVS Health.

Year to date, the stock has gained nearly 34% compared with 25% increase registered by the Zacks categorized Health Maintenance Organization. Although the industry – part of the medical sector – has been adversely affected by the replacement of Obamacare act with the new American Healthcare Act (AHCA), the stocks from this space continue to enjoy shareholders’ confidence owing to their strong growth potential.

Coming back, according to the advice that UnitedHealth received from Wells Fargo Bank, N.A, a wing of Wells Fargo and Company (WFC - Free Report) and the depositary for the exchange offer, Surgical Care’s tendered shares totaled 13.2 million (32.5% of the total shares outstanding) as of Mar 16, 2017, after the announcement of the exchange offer. Hence, investors who have already tendered their shares were not required to re-tender their shares as a result of the extension of the exchange offer expiration date.

Zacks Rank

UnitedHealth presently carries a Zacks Rank #3 (Hold). A better-ranked stock from the medical sector is HCA Holdings, Inc. (HCA - Free Report) , which carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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