Optum Enters $1.3B Deal to Buy The Advisory Board’s Health Care Business

Optum Enters $1.3B Deal to Buy The Advisory Board’s Health Care Business

The merger is expected to close later this year or early next.

Optum, the fast-growing technology services division of UnitedHealth Group, is acquiring Advisory Board, the health care branch of research and consulting firm The Advisory Board Company, for $1.3 billion.

Eden Prairie-based Optum is expected to pay $52.65 for each outstanding share of Advisory Board when the deal closes. Board members of The Advisory Board Company unanimously approved the deal and, if shareholders do as well, the transaction is expected to close by the end of the year or early in 2018.

In a joint statement on Tuesday, Optum and Washington D.C.-based Advisory Board said their pairing would benefit both parties.

For Optum, a specialist in IT solutions that serves four out of every five U.S. hospitals, it will add on newfound research, technology and consulting capabilities that, according to Advisory Board, has helped improve the operational performance of more than 4,400 health care organizations.

As for Advisory Board, the business said its capabilities and reach would expand through the addition of Optum’s large-scale operations and investment capital.

“Joining Optum will enable us to better serve our members, thanks to Optum’s unmatched data analytics resources, investment capacities and operational experience,” said Robert Musslewhite, CEO of The Advisory Board Company, in a statement. “Our team and I look forward to working with Optum to bring our innovative research capabilities into new, untapped markets.”

Per the deal, Musslewhite will stay with his company’s health care business and continue to lead it after the acquisition closes.

“The Advisory Board Company is a strong fit for Optum because they share our mission of making the health care system work better for everyone,” said Optum CEO Larry Renfro in prepared remarks. “We have great admiration for the talent and experience of The Advisory Board’s team and its leaders, and look forward to working alongside them to help its members and our clients solve their biggest challenges.”