(WSJ) Shares of LHC Group Inc. rose more than 7% on Tuesday in premarket after a cash deal to be acquired by UnitedHealth Group Inc. for $5.4 billion.
UnitedHealth is expected to pay $170 per share for LHC, representing a premium of 8.1% from the stock’s closing price on Monday.
The deal runs up to around $6 billion, including debt, and is expected to close in the second half of this year.
The transaction is expected to create one of the largest home-health firms in the US, to serve the growing demand for home-based care by patients and families.
LHC posted revenue of around $2.2 billion last year, with its portfolio cut across long-term-care hospitals, hospice, and related home health services.
The transaction comes when UnitedHealth is facing an antitrust lawsuit from the US Justice Department, with regulators saying that it could control a range of healthcare data to thwart rivals. The company says the deal would improve service to customers and cut costs.
LHCG: NASDAQ is up +7.49% on premarket, UNH: NYSE is down -0.041% on premarket
