UnitedHealth Group to buy Definity Health

[dflprincess]

http://www.startribune.com/stories/1556/5109863.html


Definity Health Corp., a St. Louis Park (MN) company born six years ago with one table in a borrowed conference room, agreed to be sold Monday for $300 million to UnitedHealth Group Inc. in a deal that gives the Minnetonka health care giant another piece of the growing segment of consumer-driven health plans.

The acquisition gives UnitedHealth access to nearly 100 Definity corporate clients, including more than 20 Fortune 500 companies, and 500,000 customers.

Definity is a pioneer in offering a new breed of health plans that combine high-deductible health coverage with personal spending accounts. As these health spending accounts move from a maverick product into mainstream use, other large insurers are likely to look for similar acquisitions such as Definity's closest competitor, Lumenos Inc. of Virginia, analysts said.

The $300 million transaction -- all in cash -- will benefit a number of employees who received stock options over the years, as well as the institutional investors who provided $85 million of venture capital through three rounds of financing. The largest stakeholders include Merrill Lynch Ventures, Ultra Partners, VantagePoint Partners and Brightstone Capital.

Definity's original long-term plan was to take the company public in the first half of 2005. But the $300 million offer at this point was too attractive to pass up for a roll of the dice later in the stock market, experts said.

UnitedHealth and Definity hope to receive approval to merge from the Federal Trade Commission and close the deal by the end of the year.


Given the amount of money UHG's PAC gave to the Bush campaign, as well as the amount raised for Bush by CEO Bill McGuire (he "achieved" Pioneer status), I wouldn't expect that FTC to decide UHG is violating any antitrust laws.

I found it strange that the article also quoted financial experts about what a great deal this is, but no medical providers or consumers opnions were given.

[katinmn]

1. I imagine the real intent is to "deep-six" Definity

before it catches on.

That's how most of the big companies, including Medtronic, deal with new innovative companies that dare to venture into their market.

I guess time will tell.

Sounded like a helluva good idea.