Surgical Care Affiliates, operator of Kansas City outpatient surgery center, sells to Optum

Optum, a leading health services company and part of UnitedHealth Group, and Surgical Care Affiliates, Inc., a leading ambulatory surgery center (ASC) and surgical hospital provider, are combining. The agreement calls for the acquisition of SCA’s outstanding common stock for $57.00 per share. SCA provides management services to KU MedWest’s surgery center.

The combination of SCA with OptumCare, Optum’s primary and urgent care delivery services business working with more than 80 health plans, will position the combined organization as a comprehensive provider of ambulatory care services, while continuing expansion of SCA’s network of ASCs and surgical hospitals in partnership with leading health systems, medical groups and health payers. The combination builds upon the two companies’ successful ASC collaborations and expands OptumCare’s capabilities in outpatient surgical procedures.

“Joining with OptumCare will enable us to better support and empower independent physicians, helping them provide high-quality care for their patients while making health care more affordable.  The combination of SCA and OptumCare is another step forward toward our vision of becoming the partner of choice for surgeons,” said Andrew Hayek, chairman and chief executive officer of SCA. “We already have a strong relationship with OptumCare, so we have seen firsthand that our cultures and strategies are aligned and complementary.”

Larry C. Renfro, vice chairman of UnitedHealth Group and Optum chief executive officer, said: “Combining SCA and OptumCare will enable us to continue the transition to high-quality, high-value ambulatory surgical care, partnering with the full range of health systems, medical groups and health plans.  We have an incredibly high regard for SCA’s leadership and people, so we look forward to working with them and our payer partners to implement care models that reward independent surgeons and specialists for quality and care efficiency.”

System-wide, SCA and its affiliates serve approximately 1 million patients per year in more than 30 states.  The company is a leader in partnering strategically with many health plans, medical groups and health systems to align with physicians through value-based payment models that reward quality, patient experience and cost-efficiency. 

With the combination, SCA will become part of the OptumCare platform, which serves millions of consumers annually through 20,000 affiliated physicians and hundreds of care facilities. Hayek and the SCA leadership team will continue forward as part of SCA and the larger OptumCare platform. The companies will offer compelling quality and value to patients and payers and support independent doctors’ practices as eligible surgical cases (e.g., total joint replacements) continue to migrate to the ASC and surgical hospital environments.

The agreement calls for the acquisition of SCA’s outstanding common stock for a fixed price of $57.00 per share, to be funded between 51 percent and 80 percent with UnitedHealth Group common stock, with the final percentage to be determined at UnitedHealth Group’s option and the remainder in cash. The transaction is expected to close during the first half of 2017, subject to the tender of a majority of SCA’s shares, regulatory approvals and other customary closing conditions, and is expected to be neutral to UnitedHealth Group’s outlook for adjusted net earnings per share in 2017 and modestly accretive in 2018.

“Over the past eight years, we have had the great pleasure of partnering with SCA as the business has transformed into a leader in the health care services sector,” said Lead Independent Director of SCA and Managing Partner of TPG Capital Todd B. Sisitsky. “We believe this combination will create significant value for SCA's patients and physician partners, and we look forward to the combined company’s future success.” Affiliates of TPG Capital, owning approximately 30 percent of the common stock of SCA, have agreed to tender their shares as part of the offer.