What happened
Shares of home healthcare solutions company Amedisys (AMED 0.69%) were up more than 14% Monday morning after the company reported that it had received an unsolicited buyout offer from Optum, a branch of UnitedHealth Group. The stock is up more than 8% so far this year.
So what
Amedisys was already having buyout discussions with Option Care Health, but UnitedHealth Group's offer is a $3.26 billion all-cash deal that would buy Amedisys for $100 per share, compared to Option Care's agreement with Amedisys of roughly $97.38 per share. The $100 per share is a 26% premium to the stock's closing price last week.
The move makes sense for Optum, which is focused on value-based care, and in-home healthcare companies have been a hot commodity this year. Optum's offer isn't contingent on financing and doesn't require shareholder approval, UnitedHealth Group said.
Amedisys has roughly 18,000 employees in 522 care centers across the U.S. and is a partner in post-acute care, with more than 3,000 hospitals.
For its part, Option Care filed a prospectus regarding the deal with the Securities and Exchange Commission on Monday, saying that if it combined with Amedisys, that stockholders from both companies would benefit. It added that the combined company would generate more than $9 billion in revenue by 2027 and more than $500 million in annual cash flow by 2025, along with roughly $1 billion in combined adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) by 2027.
Now what
Amedisys and its shareholders are in an enviable position: in the middle of a buyout bidding war. Without knowing all the details of the deal, it's hard to tell what will happen next, but Amedisys stock could certainly jump higher. Its board needs to determine if Optum's offer is considered a truly superior offer.
The company has relatively sound financials. In the first quarter, Amedisys reported revenue of $556.4 million, up 2% year over year, though its earnings per share (EPS) fell by 20.6% to $0.77 in EPS.
