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Change Healthcare Inc Ordinary Shares CHNG

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Media Reports: DOJ May Seek to Block UnitedHealth's Acquisition of Change Healthcare

Julie Utterback, CFA Senior Equity Analyst

Analyst Note

| Julie Utterback, CFA |

Reuters is reporting that the Department of Justice may seek to block narrow-moat UnitedHealth's $13 billion acquisition of no-moat Change Healthcare, which sent Change shares down substantially. In January, UnitedHealth announced plans to purchase Change for $25.75 per share, and we raised our fair value estimate for the latter to that price. However, in March, U.S. antitrust regulators announced an extension of the merger's review period. We have previously stated that if the deal doesn't close because of regulatory concerns, we would reduce the value of Change to our $16.50 stand-alone fair value estimate.

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Company Profile

Business Description

Change Healthcare is a spin-off of various healthcare processing and consulting services acquired by McKesson over numerous years. Recently, these processing assets were contributed to a joint venture and in June 2019 public shares were issued with McKesson retaining the majority interest. As of the end of the March 2020 quarter, McKesson distributed all its interest in the public processor. Core services consist of insurance (healthcare) claim clearinghouse for healthcare payers in addition to administrative and consulting services to assist healthcare providers improve reimbursement coding, billing, and collections.

424 Church Street, Suite 1400
Nashville, TN, 37219
T +1 615 932-3000
Sector Healthcare
Industry Health Information Services
Most Recent Earnings Jun 30, 2021
Fiscal Year End Mar 31, 2022
Stock Type Speculative Growth
Employees 15,000