DaVita Medical Group operates almost 300 medical clinics that provide primary and specialist care to approximately 1.7 million patients per year. DaVita's chief operating officer, Joe Mello, will continue his leadership role in the combined group, as will other members of the DaVita leadership team.
On Wednesday, only a few days after the CVS (CVS - Free Report) and Aetna (AET - Free Report) deal helped shine a light on the quickly changing healthcare industry, UnitedHealth Group (UNH - Free Report) announced that it will buy a unit of DaVita Inc.
Optum has been adding clinics and expanding the care it provides in recent years.
The nation's biggest health insurer is spending almost $5 billion to buy hundreds of clinics, just three days after rival Aetna announced a tie-up with CVS Health.
Thiry said that DaVita will continue to focus on its US and worldwide kidney care businesses and plans to pursue other investments in healthcare services outside of kidney care. It operates in states including California, Washington and Florida.
Last January, UnitedHealth also acquired a chain of surgery centers, a move the company said could lower the expense of having an outpatient surgery by more than 50 percent. The group employs around 2,200 health-care providers, including doctors, nurse practitioners and physician assistants. DaVita, which bought HealthCare Partners five years ago as a way to become a major player in the care of people with chronic conditions, found itself struggling to make money on its medical group.
After closing last night at $60.93, shares of DaVita Inc (NYSE:DVA) are up almost 9% in pre-market trading. At the time, HealthCare Partners was the largest US operator of physician groups and networks.
The announcement of the sale of DaVita Medical Group comes less than one month after CEO Kent Thiry said during an earnings call that he would consider divesting the unit that includes some 30,000 physicians after years of disappointing returns. The transaction is expected to close in 2018.
DaVita plans to use the funds from the deal to settle financial matters including stock repurchases from shareholders and paying off corporate debts.