UnitedHealth Group Inc to buy Catamaran Corp for $12.8 billion to boost pharmacy services

UnitedHealth Group Inc, America's largest health insurer, is staking a bigger claim in pharmacy benefits management with a plan to buy Catamaran Corp., for more than $12 billion in cash, the company announced, Monday.

UnitedHealth Group Inc.\’s OptumRx decided to buy Catamaran Corp., a service provider of pharmacy benefit management services, for about US$12.8 billion in the company\’s largest purchase ever, to include clients and improve its technology.

UnitedHealth will pay US$61.50 a share in cash, financing the acquisition with existing cash and new debt, the businesses said inside a statement. That\’s 27% more than Schaumburg, Illinois-based Catamaran\’s closing share price of US$48.32 on Friday.

\”The combination diversifies OptumRx\’s customer and business mix, while accelerating its technology leadership and versatile service offerings,\” the businesses said. Catamaran adds an \”industry-leading technology platform\” to OptumRx\’s capabilities in data and analytics, they said.

OptumRx and Catamaran offer specialty pharmacy services, a business with about US$100 billion in annual revenue that may quadruple by 2020, the businesses said. Catamaran manages more than 400 million prescriptions a year for 35 million members, while OptumRx manages prescription drug benefits for commercial and governmental health plans and works via a network of about 66,000 community pharmacies and mail-order pharmacies.

\”The combination of the two companies will create a unique offering in the industry unparalleled by current participants,\” Larry Renfro, CEO of OptumRx, said within the statement.

Mark Thierer, Catamaran\’s chairman and ceo, will become CEO of OptumRx, and Timothy Wicks, the current CEO, will end up president, based on the statement. The acquisition is expected to become completed in the fourth quarter of 2015, and will add about 30 U.S. cents to UnitedHealth\’s earnings per share in 2016, the companies said.

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