SAB Insight: Amedisys and Optum Merge to Create Leading Platform for Home and Alternate Site Care

SAB Capital's Dominic Padula has exclusively listed an Amedisys Home Health and Hospice in Morristown, Tennessee, a leading tenant within the healthcare service line. Amedisys, a highly experienced operator, recently made headlines with the announcement of its definitive merger agreement with Optum, the diversified healthcare services arm of United Health . Within the next few years, they have substantial plans to grow as a leading independent platform for home and alternative site care. According to Dominic Padula, Vice President of Investment Sales at SAB Capital, this matters from both an industry and a credit perspective for investors of the underlying real estate leased by these companies. "The merger highlights the current value and future potential of these service lines within the healthcare services sector, as well as establishes a credit upgrade of the tenancy with the likelihood of seeing the business lines of both companies integrated at existing locations. This integration will further solidify the importance of the physical real estate housing these services."?

Population and age are the biggest things we look at for the growth of this industry. The US has a record number of baby boomers aging into retirement, making it the perfect time for large providers to build out their business lines and bolster their market share.

Dominic adds that both businesses are "preparing to see a record number of new patients in the coming years" and that "an estimated 10,000 baby boomers will hit retirement each day through 2030," according to a recent statistic in Senior Living.

Combining Amedisys' home health and hospice care services with Optum's infusion services for home and alternative sites will establish a leading independent platform for home and alternate site care. With a nationwide workforce of over 16,500 professionals and 674 care centers, the merged company is dedicated to delivering top-quality care. This consolidation enables the company to expand its value-based care model, benefitting patients, families, providers, and care teams nationwide.

A filing with the U.S. Securities and Exchange Commission (SEC)?states that Amedisys will now be limited in exploring other options that may surface. According to the SEC, "Amedisys has agreed not to, and to cause its affiliates and its and their representatives not to, solicit, initiate or knowingly encourage or take any other action to knowingly facilitate any third-party acquisition proposals" and, in addition, has "agreed to certain restrictions on its and its affiliates’ and its and their representatives’ ability to respond to any such proposals.”

This merger will unite two companies focused on providing comprehensive care to patients and their families, with Optum is one of the largest health care services providers in the world.

For more insight on the home health investment space, reach out to:

Dominic Padula | Vice President | Investment Sales : 646.809.8843 | [email protected]