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UnitedHealth Acquires Catamaran, Creating a Top-Tier PBM

Given the power and advantages that large PBMs possess along the pharmaceutical supply chain, UnitedHealth’s deal for Catamaran makes complete sense, writes Morningstar’s Vishnu Lekraj.

On March 30,

The acquisition is all cash, with United paying Catamaran shareholders approximately $12.8 billion, or $61.50 per share. While this represents a 27% premium to Catamaran's $48.32 March 27 closing price, we believe the purchase price is largely acceptable for shareholders of both firms, given our $64 fair value estimate for Catamaran. However, the lack of a premium purchase price over our fair value for Catamaran suggests United is getting a slightly good deal. The transaction is anticipated to close in the fourth quarter.

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About the Author

Vishnu Lekraj

Senior Equity Analyst
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Vishnu Lekraj is a senior equity analyst for Morningstar Research Services LLC, a wholly owned subsidiary of Morningstar, Inc. He covers the healthcare services industry.

Lekraj joined Morningstar in 2008 after receiving a master’s degree in business administration from the University of Florida’s Hough Graduate School of Business. Before business school, he was a financial analyst for HSBC bank.

Lekraj holds a bachelor’s degree in finance from the Warrington College of Business Administration at the University of Florida, where he graduated summa cum laude. He is also a member of the Beta Gamma Sigma international honor society. In 2012, Lekraj ranked first in the professional services industry in the StarMine Analyst Awards, presented by the Financial Times.

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