Shares of Change Healthcare (NASDAQ:CHNG) had skyrocketed by 30.7% as of 12:41 p.m. EST on Wednesday. The big jump came after UnitedHealth Group (NYSE:UNH) announced plans to acquire the company in a deal valued at close to $8 billion.
The acquisition appears to be great news for Change Healthcare shareholders. The healthcare stock rose nearly 14% in 2020 -- not bad, but still less than the S&P 500's 16% gain.
Is the deal also a good one for the buyer? Probably. Change Healthcare will become part of UnitedHealth Group's Optum business segment. Change's software platform will fit nicely with Optum's focus on providing data and analytics solutions to healthcare organizations.
UnitedHealth thinks that the acquisition will boost its adjusted earnings per share by around $0.50 in 2022. After that, the company's earnings growth should pick up significant momentum.
In addition to Change's robust technology platform, UnitedHealth will also gain new team members with healthcare expertise and a track record of innovation. Notably, Change Healthcare CEO Neil de Crescenzo will become CEO of OptumInsight once the transaction closes.
The deal isn't completely done just yet. Change Healthcare shareholders and regulators must approve the acquisition first. UnitedHealth Group expects the transaction to close in the second half of this year.