UnitedHealth to buy DaVita Medical Group for $4.9 bn

UnitedHealth Group Inc, the largest health insurer in the US, yesterday struck a deal to buy DaVita Inc's primary and urgent care services DaVita Medical Group for $4.9 billion in order to expand its fast-growing medical group.

The proposed deal comes a few days after US retail pharmacy and health care company CVS Health agreed to buy health insurer Aetna for around $69 billion. (See: CVS Health to buy Aetna for around $69 bn)

UnitedHealth did not reveal any details on the financial terms of the acquisition. It has a market cap of $212 billion.

DaVita said that it plans to use the proceeds from the transaction for significant stock repurchases over the one to two years following the closing of the transaction, as well as to repay debt and for general corporate purposes.

DaVita Inc, a Fortune 500 company, is the parent company of DaVita Kidney Care and DaVita Medical Group.

DaVita Medical Group manages and operates medical groups and affiliated physician networks in California, Colorado, Florida, Nevada, New Mexico, and Washington.

It serves approximately 1.7 million patients per year through nearly 300 medical clinics featuring primary and specialist care, and also operates 35 urgent-care centers and six outpatient surgery centers.

DaVita's medical group had $4.11 billion in sales last year.

Post closing, DaVita Medical Group will become a part of UnitedHealth's unit Optum.

With more than 135,000 employees worldwide, Optum provides information and technology-enabled health services.

Optum's data, analytics, technologies and clinical expertise will help DaVita Medical Group physicians deliver even higher quality care more effectively to the patients they serve.

''With medical groups in California, Colorado, Florida, Nevada, New Mexico and Washington, DaVita Medical Group will expand the market reach of Optum's strategic care delivery portfolio, including Surgical Care Affiliates, MedExpress and HouseCalls,'' UnitedHealth said in a statement.