UnitedHealth to buy Sierra Health

UnitedHealth (UNH) is making a move:

Health insurer UnitedHealth Group Inc. said on Monday it will acquire Sierra Health Services Inc. for more than $2.4 billion to expand in the fast-growing Las Vegas area and boost its Medicare business.
The deal shows UnitedHealth, the largest U.S. health insurer by market value, is continuing to broaden its reach by gobbling up rivals — and could signal a renewed round of consolidation throughout the sector.
Piper Jaffray analyst Melissa Mullikin said Sierra would help UnitedHealth fill a gap in Nevada.
“We definitely think it’s a positive for (UnitedHealth),” Mullikin said. “That’s a really desirable geography.”
The $43.50 per share deal represents a 21 percent premium over Sierra’s closing price of $35.90 on Friday. As of Feb. 23, Sierra had 55.76 million shares outstanding, giving the deal a value of about $2.43 billion.

Best of all, the deal is all cash.

Posted by on March 12th, 2007 at 3:11 pm


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