Amedisys to Divest Hospice, Home Health Locations to BrightSpring, The Pennant Group

Amedisys Inc. (Nasdaq: AMED) is divesting a number of its home health and hospice locations to several companies in advance of its acquisition by the UnitedHealth Group (NYSE: UNH) subsidiary Optum.

Amedisys is selling a number of its care centers to Adoration Home Health Acquisitions, LLC, Adoration Hospice Care Acquisitions, LLC, and Senescence, LLC, DBA All Saints Hospice. These three companies are all affiliates of BrightSpring Health Services (Nasdaq: BTSG).

The home health and hospice provider will also sell some home health locations to Cornerstone Healthcare, Inc. and Tensaw River Healthcare, LLC, affiliates of The Pennant Group (Nasdaq: PNTG).

Advertisement

UnitedHealth Group is also divesting a number of its own care centers as a part of these transactions.

The sale is contingent upon the closure of the Optum transaction, according to a U.S. Securities and Exchange Commission (SEC) filing by Amedisys.

“Consummation of the BrightSpring Divestiture is contingent on a number of conditions, including the consummation of the previously announced merger transaction contemplated under the Agreement and Plan of Merger, dated June 26, 2023 by and among UnitedHealth Group, Aurora Holdings Merger Sub Inc., a wholly owned subsidiary of UnitedHealth Group, and Amedisys,” the company indicated in the SEC filing.

Advertisement

Amedisys offers home health, hospice and palliative care, among other services to more than 465,000 patients annually across 38 states and Washington D.C.

The UnitedHealth Group subsidiary Optum, in June 2023 inked its agreement to acquire Amedisys in an all-cash transaction of $101 per share, or about $3.3 billion. Last summer, the U.S. Justice Department (DOJ) began investigating potential antitrust concerns related to the deal.

The divestiture comes as Amedisys is embroiled in a lawsuit by the U.S. Department of Justice (DOJ) to block the UnitedHealth Group deal. The sale of these assets is likely designed to ameliorate some of those concerns. Amedisys previously agreed to sell some of its locations to the home health and hospice provider VitalCaring, but that agreement fell through.

DOJ’s chief concern is that the combination of the two companies would dampen competition in the hospice and home health space. Should the transaction proceed without a divestiture, Optum would control 30% or more of the home health or hospice services in eight states, according to the DOJ’s complaint. The deal would expand Optum’s home health and hospice footprint to five additional states, allowing the company to gain nearly 500 locations in 32 states.

The DOJ alleges that UnitedHealth Group is overcoming the competition by acquiring them rather than beating them in the market. The insurance mammoth last year also purchased the home health and hospice provider LHC Group for $5.4 billion.

Companies featured in this article:

, ,