Optum to acquire DaVita Medical Group for approximately $4.9B in cash
The agreement, entered into on December 5, calls for Optum to acquire DaVita Medical Group for approximately $4.9B in cash.
The transaction is expected to close in 2018 and is subject to regulatory approval and other customary closing conditions.
Following the transaction, DaVita Medical Group will become part of Optum’s OptumCare division, which works with more than 80 health plans to serve millions of consumers annually through 30,000 affiliated physicians and hundreds of care facilities.
DaVita’s medical unit had been a significant drag on the company’s financial performance in recent quarters.
The company said it would use the proceeds from the sale for stock buybacks after the deal closes next year, and to repay debt.
Joe Mello, COO of DaVita Medical Group, will continue in a leadership role in the combined entity, as will the DaVita Medical Group leadership team.
DaVita plans to use the proceeds from the transaction for significant stock repurchases over the one to two years following the closing of the transaction, as well as to repay debt and for general corporate purposes.
DVA closed at $60.93. It last traded at $68.29.
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