By Lisa Kerner
Charlotte, N.C., March 12 - UnitedHealth Group signed a definitive merger agreement to acquire all the outstanding shares of Sierra Health Services, Inc. for $43.50 per share in cash, or a total equity value of $2.6 billion.
The transaction, approved by both companies' boards of directors, is expected to close by the end of 2007.
"We have completed extensive due diligence, and expect Sierra's positive performance to continue," UnitedHealth Group chief financial officer Mike Mikan said in a company news release. "Sierra is a financially strong organization with very stable operations and systems and has a long and well-recognized history of consistently and profitably delivering high-quality, affordable health care in Nevada."
UnitedHealth Group expects the acquisition will be immediately accretive to earnings per share upon closing, adding earnings of about $0.04 per share in the first 12 months.
The company said it will finance the transaction with cash on hand, cash flows from operations and normal capital market activities.
UnitedHealth Group reiterated plans to buy back $4.0 billion to $4.5 billion of stock in 2007 under its ongoing share repurchase program.
Sierra is a Las Vegas provider of health benefits and services.
UnitedHealth Group is a diversified health company located in Minneapolis.
| Acquirer: | UnitedHealth Group
|
| Target: | Sierra Health Services, Inc.
|
| Transaction value: | $2.6 billion
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| Payment per share: | $43.50
|
| Announcement date: | March 12
|
| Expected closing: | By the end of 2007
|
| Stock price for target: | NYSE: SIE; $35.90 on March 9
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