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Deal: WindRose Health Investors’ pending sale of myNexus, which helps manage the costs of healthcare in the home, is valued north of $800 million, sources familiar with the matter told PE Hub.
Anthem’s agreement to buy myNexus, announced last week, preempted an anticipated sale process from getting underway this spring, sources said.
For WindRose, the transaction suggests a handsome outcome. The New York-headquartered firm in June 2019 completed a dividend recapitalization of the business, through which myNexus was set to distribute more than $200 million to investors as part of the deal, a source told PE Hub at that time. For WindRose, the recap implied it had so far made close to 15x its money on myNexus, the source said.
Digging deeper: The Department of Justice on Friday requested more information regarding UnitedHealth Group and Change Healthcare’s pending transaction, essentially calling for an extension of the typical 30-day waiting period under the HSR act.
The SEC filing comes after UnitedHealth Group, via its Optum subsidiary, agreed to buy the healthcare technology company for $8 billion, or $13 billion including debt, in January. Blackstone Group, an approximately 20 percent owner of Change common stock, agreed to vote in favor of the deal.
Earlier this month, the American Hospital Association sent a letter pressuring the the Antitrust Division of the Department of Justice to conduct a thorough investigation of the proposed deal. The combination “threatens to reduce competition for the sale of health care information technology (IT) services to hospitals and other health care providers, which could negatively impact consumers and health care providers,” the letter said.
“Because Optum’s parent, UHG, also owns the largest health insurance company – UnitedHealthcare – in the United States, the combination of the Parties’ data sets would impact (and likely distort) decisions about patient care and claims processing and denials to the detriment of consumers and health care providers, and further increase UHG’s already massive market power,” it said.
UnitedHealth via Optum has long been known as a serial acquirer, and notably, many of its deals are not even announced.
That includes Landmark Health, a physician-led in-home medical group, which it is reportedly nearing a $3.5 billion deal to acquire. The company also did not reveal its 2020 deals for CareMount Medical and naviHealth, the latter which scored a $2.5 billion enterprise value, providing an exit for CD&R, PE Hub wrote.
Although other large healthcare insurers make acquisitions, the aggressiveness of United/Optum does not compare. Sources also estimate the company has more than 100 employed in the M&A team.
What are your thoughts on the United-Change deal? Hit me up with any thoughts or tips on private equity dealmaking at firstname.lastname@example.org. Have a great week!