Option Care Health to buy Amedisys for $3.6 billion


Option Care Health on Wednesday announced plans to acquire health and hospice firm Amedisys for $3.6 billion in a deal that reflects companies’ need to build scale as care options increasingly move into the home.

The all-stock transaction would create a mammoth provider of post-acute care services, generating approximately $6.2 billion in annual revenue and delivering a variety of in-home services in 46 states and across 674 sites.

Option Care Health is the nation’s largest independent provider, by revenue, of home and alternate site infusion services. Amedisys is the nation’s second-largest provider of home healthcare, and a leader in hospital-at-home, palliative care and hospice services.

“We think this positions us well within an evolving market in which value-based care begins to take a bigger hold on the future and more importantly the needs of the payer community,” Option Care Health President and CEO John Rademacher said during a call with analysts Wednesday.

The acquisition would give Option Care Health greater access to the lucrative Medicare and Medicaid market. It generates only about 12% of its revenues from government payers. Acquiring Amedisys would increase that share to 35%, executives said.

A combined company would also provide payers and large health systems with one-stop shopping when it comes to referring patients for care.

“We know there is waste in the system that exists in its current form and so the ability of us to have a better coordination of care and make certain we are delivering superior clinical outcomes through the intervention of both of our clinical resources we believe will be of high value to payers who are very concerned about the ability to curb the costs,” Rademacher said.

Amedisys President and CEO Richard Ashworth negotiated the merger less than three months after assuming the leadership role at the Baton Rouge, Louisiana-based company.

Rademacher will remain president and CEO of Option Care, which will continue to be based in Bannockburn, Illinois. Ashworth will act as an advisor to the company.

For Amedisys, its pending sale is the latest step in what has been a transformative two years. In 2021, it moved into the hospital-at-home business by acquiring Nashville-based Contessa for $250 million. Earlier this year, Amedisys shed its personal care business.

Option Care Health and Amedisys have had a working relationship in recent years with Option Care providing home infusion services to Amedisys patients during the COVID-19 pandemic.

Ashworth said the deal will benefit patients of both companies. “There is a fantastic opportunity between both organizations to increase the health outcomes for both of the patients that we have by combining our services, let alone the ability to develop and retain an 18,000-plus clinician workforce is pretty exciting,” he said during the call.

Under the terms of the definitive agreement, shareholders of Amedisys will receive 3.0213 shares of Option Care Health’s common stock for each share of Amedisys common stock they hold at the closing of the transaction, the equivalent of $97.38 per Amedisys share based on Option Care Health’s closing stock price on May 2. It represents a premium of about 26% to Amedisys stockholders based on the company’s May 2 closing price.

The deal includes the assumption of debt and is expected to close in the second half of the year, pending approval from regulators and shareholders of both companies.

Each company reported first-quarter earnings Wednesday. Option Care Health reported net income of $39.2 million, or 22 cents per share, compared with $30.3 million, or 17 cents a share in the year-ago period. Quarterly revenues rose 10.9% to $1.01 billion.

Amedisys said it earned $25.2 million, or 77 cents a share, in the first quarter, compared with $31.7 million, or 97 cents a share a year ago. Revenue rose 11.1% to $556.4 million.


Source link

Leave a Reply