UnitedHealth to buy 90 percent stake in Brazilian managed care company
UnitedHealth Group announced yesterday that it would pay $4.9 billion to buy a 90 percent stake in Brazilian healthcare company Anil Participações S.A., the country's largest private insurer and operator of health clinics serving more than 5 million people.
The deal comes as UnitedHealth's CEO Stephen J. Hemsley anticipates the Brazilian market growing at twice the pace of the U.S. market in the coming years.
"Brazil has emerged as a consistently growing and evolving market for private sector health benefits and services. Its growing economy, emerging middle class and progressive policies toward managed care make it a high potential growth market," said Hemsley in a press release. "Combining Amil, the clear market leader serving an under-penetrated market of nearly 200 million people, with UnitedHealth Group's experiences and capabilities developed over the last three decades is the most compelling growth and value creation opportunity we have seen in years."
The addition of Anil to the UnitedHealth portfolio of companies also marks its first entry into any market with a company that runs both health plans and an integrated healthcare delivery network. Anil currently owns 22 hospitals, nearly 50 clinics and a number of specialty care and emergency care centers. In all, its health insurance network encompasses more than 44,000 doctors, 3,300 hospitals, 11,000 outpatient clinics and 12,000 ancillary services facilities according to information released by the companies.
The opportunity for UnitedHealth lies in the current make-up of the Brazilian market where healthcare is paid for by both public and private health insurance plans, similar to the structure of the U.S. market. But in Brazil, only about one-quarter of the population have private health insurance compared with the 80 percent market penetration enjoyed by private insurers in this country.
Under the terms of the deal, UnitedHealth will acquire 90 percent of the company for $4.9 billion. When a current $600 million tax benefit is taken into account, UnitedHealth's net purchase price is $4.3 billion.
The remaining 10 percent of Anil will be held by Amil's founder, Edson Bueno, MD, and his partner, Dulce Pugliese, MD. The two partners currently control roughly 70 percent of Anil shares and will retain 10 percent for at least five years after the deal closes.
In addition, Bueno has agreed to buy $470 million in UnitedHealth stock and will also assume a seat on the company's board of directors.
Anil's 2012 revenues are estimated to be nearly $5 billion, which represents an increase of 15 percent over the previous year.
