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Amedisys (AMED) to Advance Value-Based Care With Optum Merger
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Amedisys, Inc. (AMED - Free Report) recently announced that it would be acquired by UnitedHealth Group Incorporated (UNH) unit, Optum, scraping a previous all-stock deal offer from Option Care Health. Combining Amedisys with Optum brings together two organizations committed to offering patients and their families compassionate, value-based comprehensive care.
Per the agreement, the acquisition of Amedisys’s outstanding common stock in an all-cash transaction for $101 per share. The agreement is subject to Amedisys shareholder approvals, regulatory approvals and other customary closing conditions. This represents more than 10% premium to the closing stock price of Amedisys on Jun 23, 2023.
About Optum
As a provider of information and technology-enabled health services, Optum is devoted to assisting in the improvement of the health system's performance. The firm offers innovative, integrated solutions that support the modernization of the healthcare system and enhance general population health. It employs more than 220,000 people globally.
United Health’s Optum Outbids Option Care Health Deal
In May 2023, Amedisys entered into a definitive merger agreement with OptionCare Health to combine in an all-stock transaction that values Amedisys at nearly $3.6 billion, including the assumption of net debt.
Image Source: Zacks Investment Research
As part of the mutual termination agreement, Option Care Health will receive a $106-million termination fee. Consistent with Option Care Health's commitment to creating shareholder value, the company will incorporate the termination fee into its established capital allocation strategy.
How Strategic is Optum Care Deal?
There has been a spike in demand for in-house care ever since the epidemic swept the globe. People can receive care in the convenience of their own homes. By combining Optum's extensive value-based care expertise with Amedisys' dedication to quality and care innovation in the home and its employees' patient-first culture, these factors can significantly improve the health outcomes and experiences of more patients at lower costs, resulting in continued growth.
Industry Prospects
Per a report by Grand View Research, the global home healthcare market size was valued at $362.10 billion in 2022 and is expected to witness a CAGR of 7.96% by 2030. Rising awareness of home care facilities and disposable income is leading to demand of for home healthcare services. The bed-ridden and old patients opt for home healthcare services and products, as it reduces readmission to the hospital and the recovery rate is higher in comparison to in-hospital.
Considering the market opportunities, Amedisys latest will expand the company’s horizon for advancing value-based care for patients.
Progress within Amedisys Business
Amedisys ended the first quarter with better-than-expected earnings. In recent times, the company has kept several growth opportunities in its pipeline. These include progress in direct relationships with health systems, partnering with a leading comprehensive care at-home provider and health plans that are into value-based arrangements for in-home services.
The Contessa Health acquisition seems to be strategically aligned with Amedisys’ business, experiencing continued positive momentum in the first quarter, offering home-based recovery solutions to patients needing acute care. During the first quarter, Personal Care, net service revenues increased 7.1% from the year-ago number. The High Acuity Care segment reported an 88% surge from the year-ago figure.
Per February 2023 update, the company noted that the recent regulatory development in this space expands company’s opportunities in home health market. As part of the Omnibus spending bill that became law on December 29, 2022, CMS extended the acute hospital care at-home initiative until December 31, 2024.
Price Performance
Shares of the company have declined 16.8% in the past year compared with the industry’s fall of 4.8%.
Zacks Rank and Key Picks
Amedisys carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader medical space are Hologic, Inc. (HOLX - Free Report) , Merit Medical Systems, Inc. (MMSI - Free Report) and Boston Scientific Corporation (BSX - Free Report) .
Hologic, carrying a Zacks Rank #2 (Buy) at present, has an estimated growth rate of 5.1% for fiscal 2024. HOLX’s earnings surpassed estimates in all the trailing four quarters, the average being 27.3%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Hologic has gained 14.9% compared with the industry’s 10.0% rise in the past year.
Merit Medical, carrying a Zacks Rank #2 at present, has an estimated long-term growth rate of 11%. MMSI’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 20.2%.
Merit Medical has gained 51.1% compared with the industry’s 19.4% rise in the past year.
Boston Scientific, carrying a Zacks Rank #2 at present, has an estimated long-term growth rate of 11.5%. BSX’s earnings surpassed estimates in two of the trailing four quarters and missed in the other two, the average surprise being 1.9%.
Boston Scientific has gained 41.5% against the industry’s 22.1% decline in the past year.
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Amedisys (AMED) to Advance Value-Based Care With Optum Merger
Amedisys, Inc. (AMED - Free Report) recently announced that it would be acquired by UnitedHealth Group Incorporated (UNH) unit, Optum, scraping a previous all-stock deal offer from Option Care Health. Combining Amedisys with Optum brings together two organizations committed to offering patients and their families compassionate, value-based comprehensive care.
Per the agreement, the acquisition of Amedisys’s outstanding common stock in an all-cash transaction for $101 per share. The agreement is subject to Amedisys shareholder approvals, regulatory approvals and other customary closing conditions. This represents more than 10% premium to the closing stock price of Amedisys on Jun 23, 2023.
About Optum
As a provider of information and technology-enabled health services, Optum is devoted to assisting in the improvement of the health system's performance. The firm offers innovative, integrated solutions that support the modernization of the healthcare system and enhance general population health. It employs more than 220,000 people globally.
United Health’s Optum Outbids Option Care Health Deal
In May 2023, Amedisys entered into a definitive merger agreement with OptionCare Health to combine in an all-stock transaction that values Amedisys at nearly $3.6 billion, including the assumption of net debt.
Image Source: Zacks Investment Research
As part of the mutual termination agreement, Option Care Health will receive a $106-million termination fee. Consistent with Option Care Health's commitment to creating shareholder value, the company will incorporate the termination fee into its established capital allocation strategy.
How Strategic is Optum Care Deal?
There has been a spike in demand for in-house care ever since the epidemic swept the globe. People can receive care in the convenience of their own homes. By combining Optum's extensive value-based care expertise with Amedisys' dedication to quality and care innovation in the home and its employees' patient-first culture, these factors can significantly improve the health outcomes and experiences of more patients at lower costs, resulting in continued growth.
Industry Prospects
Per a report by Grand View Research, the global home healthcare market size was valued at $362.10 billion in 2022 and is expected to witness a CAGR of 7.96% by 2030. Rising awareness of home care facilities and disposable income is leading to demand of for home healthcare services. The bed-ridden and old patients opt for home healthcare services and products, as it reduces readmission to the hospital and the recovery rate is higher in comparison to in-hospital.
Considering the market opportunities, Amedisys latest will expand the company’s horizon for advancing value-based care for patients.
Progress within Amedisys Business
Amedisys ended the first quarter with better-than-expected earnings. In recent times, the company has kept several growth opportunities in its pipeline. These include progress in direct relationships with health systems, partnering with a leading comprehensive care at-home provider and health plans that are into value-based arrangements for in-home services.
The Contessa Health acquisition seems to be strategically aligned with Amedisys’ business, experiencing continued positive momentum in the first quarter, offering home-based recovery solutions to patients needing acute care. During the first quarter, Personal Care, net service revenues increased 7.1% from the year-ago number. The High Acuity Care segment reported an 88% surge from the year-ago figure.
Per February 2023 update, the company noted that the recent regulatory development in this space expands company’s opportunities in home health market. As part of the Omnibus spending bill that became law on December 29, 2022, CMS extended the acute hospital care at-home initiative until December 31, 2024.
Price Performance
Shares of the company have declined 16.8% in the past year compared with the industry’s fall of 4.8%.
Zacks Rank and Key Picks
Amedisys carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader medical space are Hologic, Inc. (HOLX - Free Report) , Merit Medical Systems, Inc. (MMSI - Free Report) and Boston Scientific Corporation (BSX - Free Report) .
Hologic, carrying a Zacks Rank #2 (Buy) at present, has an estimated growth rate of 5.1% for fiscal 2024. HOLX’s earnings surpassed estimates in all the trailing four quarters, the average being 27.3%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Hologic has gained 14.9% compared with the industry’s 10.0% rise in the past year.
Merit Medical, carrying a Zacks Rank #2 at present, has an estimated long-term growth rate of 11%. MMSI’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 20.2%.
Merit Medical has gained 51.1% compared with the industry’s 19.4% rise in the past year.
Boston Scientific, carrying a Zacks Rank #2 at present, has an estimated long-term growth rate of 11.5%. BSX’s earnings surpassed estimates in two of the trailing four quarters and missed in the other two, the average surprise being 1.9%.
Boston Scientific has gained 41.5% against the industry’s 22.1% decline in the past year.