UnitedHealth unit to pick up UK health tech company EMIS for $1.5B

A UnitedHealth Group unit plans to acquire EMIS Group in an all-cash deal that values the U.K. health technology company at about 1.24 billion pounds sterling, or $1.5 billion, the companies announced Friday.

Per the terms of the deal, an affiliate of UnitedHealth's Optum business in the U.K., Bordeaux UK Holdings II Limited, has offered 1,925 pence per share in cash, reflecting a 49% premium to EMIS’ closing price on Thursday.

Shares in the Leeds-based healthcare software maker closed 47% higher at 1,901.95 pence on Friday in London, giving a market capitalization of about 1.2 billion pounds.

Reuters reports that the EMIS directors intend to unanimously recommend the deal to shareholders.

EMIS provides healthcare software, information technology and other services in the U.K., with a focus on primary care and pharmacy systems.  

Optum's U.K. business has worked in the country for 20 years supporting the state-run National Health Service (NHS), according to an announcement. The company describes itself as a healthcare software, services and consultancy business, delivering population health management programs to more than 45 million people in the U.K. and medicines optimization services across the country.

Optum UK CEO Rob Sergeant said in a statement the deal to acquire EMIS will bring more advanced technology solutions and capabilities to the NHS and general practitioners to improve patient care.

The combination will strengthen EMIS’ capabilities as a leading U.K. healthcare technology company, with an enhanced ability to deliver important benefits for patients, clinicians and the NHS, Optum UK executives said.

"We believe this combination will have the resources and expertise to enable us to better support the NHS and clinicians through technology innovations," said Andy Thorburn, CEO of EMIS, in a statement.

"EMIS’s long-standing track record of delivering effective technology solutions and strong financial and operating performance combined with UnitedHealth Group’s resources and expertise will enable us to accelerate our development. We therefore consider that the combined group will be well-positioned to serve its customers and partners in the UK’s healthcare system, whilst ensuring EMIS remains a strong organization supporting the NHS, thereby fulfilling EMIS’ purpose of enabling better care through technology innovation," Thorburn said.

The proposed transaction would be UnitedHealth’s largest disclosed acquisition in Europe since British executive Andrew Witty became CEO last year, according to Bloomberg.

In the U.S., Optum has been on an acquisition hot streak, reportedly scooping up Healthcare Associates of Texas earlier this month. In March, UnitedHealth announced plans to buy home health provider LHC Group in a $5 billion deal and quietly purchased behavioral health company Refresh Mental Health.

In addition, in April it was reported that the healthcare giant would pick up Houston-based Kelsey-Seybold Clinic.

UnitedHealth is also embroiled in a legal scuffle with the federal government over its planned acquisition of Change Healthcare, which would join the Optum fold. The Department of Justice sued to block the deal on antitrust grounds, and a trial is set for August.