Health care industry

OptumRx to Acquire Canada's Catamaran, Expanding Pharmacy Services and Diversifying Business Mix

Strategic Insights

Mar 29, 2015 — 1 min read

UnitedHealth Group's OptumRx pharmacy care services business has agreed to acquire Canadian pharmacy benefit management services firm Catamaran Corp. for USD 61.50 per share in cash. The acquisition, expected to close in 4Q15, will diversify OptumRx's customer and business mix, accelerate its technology leadership, and enhance its flexible service offerings. As a result of the deal, UnitedHealth Group expects an accretion of USD 0.30 per share in 2016 to its net earnings.

Key Takeaways:

OptumRx will acquire Catamaran's outstanding common stock for USD 61.50 per share in cash, with expectations to close the deal in 4Q15.
The acquisition will diversify OptumRx's customer and business mix, accelerating its technology leadership and flexible service offerings.
UnitedHealth Group expects the acquisition to be accretive to its net earnings in the area of USD 0.30 per share in 2016.
Upon closing, Mark Thierer, Catamaran's chairman and CEO, will serve as CEO of OptumRx, while Timothy Wicks will assume the role of president.
The combined entity will fulfill more than 400m prescriptions in 2015, with OptumRx's roughly 600m annual scripts, positioning them as a competitive force in the PBM industry.
The acquisition will be financed from existing cash resources and new debt, with UnitedHealth Group affirming its earnings outlook, assuming the absorption of all merger costs.
Jeffrey Grosklags, current CFO of OptumRx, will continue in that role, while Jeff Park will become the chief operating officer for OptumRx.

Statistics:

Acquisition price per share: USD 61.50
Expected close date in 4Q15
Projected accretion to UnitedHealth Group's net earnings in 2016: USD 0.30 per share
2015 prescriptions fulfilled by Catamaran: more than 400m
2015 annual scripts handled by OptumRx: roughly 600m
Expected combined entity's position in the PBM industry: competitive force

Sources:

M2 EQUITYBITES-March 30, 2015-US Pharmacy Services Firm OptumRx to Acquire Canada's Catamaran (C)2015 M2 COMMUNICATIONS http://www.m2.com 30 March 2015

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