Optum To Buy DaVita Medical Group For About $4.9 Bln In Cash

The Minnetoka Minnesota campus of United Health Group which said Wednesday that it will buy the Da Vita Medical Group

The Minnetoka Minnesota campus of United Health Group which said Wednesday that it will buy the Da Vita Medical Group

UnitedHealth Group Inc. will buy DaVita Inc.'s physician group for about $4.9 billion in cash, in the latest sign of how the parent of the biggest US insurer is rapidly expanding its role as a health-care provider.

The deal with Denver-based DaVita, which mainly provides dialysis services, will combine UnitedHealth's Optum unit with DaVita's physician network business that serves about 1.7 million patients each year through almost 300 clinics. The group employs around 2,200 health-care providers, including doctors, nurse practitioners and physician assistants.

The all-cash deal is UnitedHealth's second major acquisition in 2017 that aims to broaden its reach beyond insurance and boost its outpatient care services through a large network of clinics.

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Executives at Optum added that their ability to leverage analytics and health information technology will allow both organizations to deliver the best possible care. DaVita later expanded it. DaVita's largest business is kidney care, through the 2,470 outpatient dialysis centers that it runs or provides administrative services to across the USA, serving more than 200,000 patients a year.

The announcement of the sale of DaVita Medical Group comes less than one month after CEO Kent Thiry said during an earnings call that he would consider divesting the unit that includes some 30,000 physicians after years of disappointing returns. DaVita paid $4.4 billion for the physician-network business in 2012, but has sold small chunks and acquired other businesses since.

DaVita plans to use the funds from the deal to settle financial matters including stock repurchases from shareholders and paying off corporate debts. This deal, which is expected to close in 2018, is aimed to help expand UnitedHealth's primary and urgent care services.

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