CHANGE HEALTHCARE INC.

(CHNG)
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Delayed Nasdaq  -  04:00 2022-07-01 pm EDT
23.72 USD   +2.86%
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UnitedHealth to sell Change Healthcare's claims business for $2.2 bln

04/25/2022 | 09:57am EDT
UnitedHealth Group's headquarters building is seen in Minnetonka, Minnesota

April 25 (Reuters) - UnitedHealth Group has agreed to sell Change Healthcare's claims editing business for $2.2 billion in a move some analysts say could ease regulatory hurdles in the way of an $8 billion merger between the healthcare companies.

Earlier this year, the U.S. Department of Justice (DoJ) sued to stop the acquisition for giving UnitedHealth access to competitors' data, forcing the companies to extend the deal's closing date by nine months to Dec. 31.

The sale of the claims business, to private equity firm TPG Capital, will only go through once UnitedHealth's acquisition of Change is complete, Change said in a regulatory filing. https://www.sec.gov/ix?doc=/Archives/edgar/data/1756497/000119312522116452/d574197d8k.htm

UnitedHealth and Change offer competing softwares for processing healthcare claims and together serve 38 of the top 40 health insurers in the country, the DoJ said in its complaint in February.

Owning Change's claims business, ClaimsXten, would offer UnitedHealth a window into rival health plans at Humana Inc , Anthem Inc <ANTM.N, CVS Health Corp's Aetna and Cigna Corp, the agency said.

Citi analyst Daniel Grosslight said the sale of the claims business will likely remove the DoJ's argument against the merger, and potentially increase the probability of the deal going through.

"We do not think this will reduce the value of Change to UnitedHealth as there is significant overlap between ClaimsXten and Optum's PI solution," Grosslight wrote in a note.

Optum is UnitedHealth's health services unit which will absorb Change if the acquisition is completed.

UnitedHealth, which has said it would fight the lawsuit, did not have any further comments on the deal beyond the regulatory filing.

Shares of Change Healthcare were up 1.03% at $23.8, while UnitedHealth fell about 1% to $515.70.

"It looks like the market is betting that this transaction could grease the wheels of getting the deal done, considering the Change share movement today in a down market," Morningstar analyst Julie Utterback told Reuters.

(Reporting by Mrinalika Roy in Bengaluru; Editing by Devika Syamnath)


© Reuters 2022
Stocks mentioned in the article
ChangeLast1st jan.
ANTHEM, INC. 0.70% 485.98 Delayed Quote.4.11%
CHANGE HEALTHCARE INC. 2.86% 23.72 Delayed Quote.10.94%
HUMANA AB (PUBL) 0.45% 44.8 Delayed Quote.-38.38%
HUMANA INC. 2.33% 478.96 Delayed Quote.0.91%
UNITEDHEALTH GROUP 0.73% 517.4 Delayed Quote.2.29%
All news about CHANGE HEALTHCARE INC.
06/24CHANGE HEALTHCARE INC.(NASDAQGS : CHNG) added to Russell 1000 Growth Index
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06/24CHANGE HEALTHCARE INC.(NASDAQGS : CHNG) added to Russell 2500 Growth Index
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06/24CHANGE HEALTHCARE INC.(NASDAQGS : CHNG) added to Russell Midcap Growth Index
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06/24CHANGE HEALTHCARE INC.(NASDAQGS : CHNG) added to Russell 3000E Growth Index
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06/24CHANGE HEALTHCARE INC.(NASDAQGS : CHNG) added to Russell 3000 Growth Index
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Analyst Recommendations on CHANGE HEALTHCARE INC.
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Financials (USD)
Sales 2023 3 598 M - -
Net income 2023 -12,9 M - -
Net Debt 2023 3 868 M - -
P/E ratio 2023 -651x
Yield 2023 -
Capitalization 7 556 M 7 556 M -
EV / Sales 2023 3,18x
EV / Sales 2024 3,06x
Nbr of Employees 14 000
Free-Float 99,1%
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Mean consensus OUTPERFORM
Number of Analysts 10
Last Close Price 23,72 $
Average target price 25,94 $
Spread / Average Target 9,35%
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Managers and Directors
Neil E. de Crescenzo President, Chief Executive Officer & Director
Fredrik J. Eliasson Chief Financial Officer & Executive Vice President
Howard L. Lance Chairman
August W. Calhoun Executive VP, President-Sales & Operations
Monica McCullough Chief Compliance & Ethics Officer
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