Insurance giant UnitedHealth Group Inc. has purchased mental health company Genoa Healthcare, according to a source close to the companies.
Minnetonka-based UnitedHealth beat out other suiters, including Walgreens Boots Alliance, in its $2.5 billion deal, the source told Bloomberg, on condition of anonymity because terms of the deal are not being disclosed.
Rumors of the developing deal were reported early August by Axios with Bloomberg speculating the acquisition could exceed $2 billion.
UnitedHealth will acquire Genoa from the current owner, Boston-based private equity group Advent International, which bought an 80 percent stake in Genoa in 2015.
Adding Genoa grows UnitedHealth Group’s presence in the mental health sector, as Washington-based Genoa operates more than 425 pharmacies nationwide that all deal specifically with patients who have behavioral or other chronic health issues.
The acquisition comes as merger activity continues at a steady clip in the health care industry. Notable buys include last year’s CVS purchase of Aetna for $69 billion and Amazon deal for prescription delivery startup PillPack Inc. earlier this year.
Former Blue Cross and Blue Shield of Minnesota CEO Michael Guyette told TCB in an interview this April that launching strategic partnerships – as with UnitedHealth Group absorbing Genoa – is how localized healthcare entities stay competitive among the evolving marketplace.
Genoa will be wrapped into UnitedHealth’s pharmacy benefit group OptumRx.
“To help better support the pharmacy needs of patients with behavioral health and substance use disorders, OptumRx is combining with Genoa Healthcare,” Optum spokesperson Drew Krejci said in a statement to FierceHealthcare. “This will help ensure improved access, health outcomes and pharmacy, telepsychiatry, and medication management experiences for consumers across the country, including Medicare and Medicaid beneficiaries, while helping public and private sector payers reduce their healthcare costs.”
There’s been no word yet on the deal’s impact on executives or staff, but in the August report from Axios, it was stated that Genoa CEO John Figuero would move on while the company’s COO Mark Peterson would take over leadership of Genoa under UnitedHealth.