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--Combined clinical, technology and operating capabilities establishes a distinctive growth platform to serve the needs of well-positioned, expanding economies
--Growth diversification alongside UnitedHealth Group’s market leading UnitedHealthcare and Optum businesses
--Sustains and strengthens Amil’s growth and potential in Brazil and in serving emerging markets going forward
UnitedHealth Group (UNH) and Amil Participacoes S.A. (BM&FBOVESPA:
AMIL3) announced today that the companies have agreed to merge, bringing
together two leading organizations with the broad scale, distinctive
resources and advanced technology to help modernize the performance of
the health systems and serve the health care needs of consumers in their
markets in the Americas.
Amil is Brazil’s largest health care company, providing health and
dental benefits, hospital and clinical services, and advanced care
management resources to more than 5 million people. Outside the United
States, Brazil is the largest and fastest growing private health care
market in the Americas.
UnitedHealth Group is the largest health benefits and services company
in the United States and a leader in innovative approaches to improving
consumer health and advancing the health care system.
"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 Stephen J. Hemsley, president
and CEO of UnitedHealth Group. "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."
Dr. Edson Bueno, founder and chief executive officer of Amil, said, "Our
union with UnitedHealth Group will enable us to bring advanced
technology, a tradition of practical innovation, service initiatives and
clinical programs to further strengthen health care in Brazil, and
enable Amil to grow faster and do more to care for patients and serve
consumers as a leading Brazilian company."
Expanding Market in Brazil and Market Leading
Position
Supported by an economy with average GDP per capita growing at a
compound annual rate of 19.4 percent since 2003, and a GDP per capita
almost 2.5 times that of China, demand for private health care coverage
continues to rise in Brazil. Private health benefit membership rose from
35 million people in 2005 to nearly 48 million in 2011, but still serves
only about 25 percent of the population, compared with nearly 80 percent
penetration in the U.S.
Amil uniquely in Brazil offers a full range of health benefits products
across an array of price points, as well as robust dental benefits.
Amil’s 2012 annualized revenues, in the range of $5 billion, represents
an increase of 15 percent over 2011. The company’s market position has
been built through a focus on innovative products, responsive service,
strong brands, and affordable access to private health care delivery
resources.
Amil operates a distinctive care delivery model, which efficiently
integrates health benefits with care services on a selective basis. Its
owned delivery network includes 22 hospitals and nearly 50 clinics, plus
a number of leading specialty and preventive care outpatient clinics and
emergency care centers. Amil maintains the largest care network serving
Brazil, including 44,000 doctors, 3,300 hospitals, nearly 11,000
outpatient clinics and 12,000 ancillary service facilities. The
combination of patient-focused disease management programs, effective
alignment with and direction of patients to clinical centers of
excellence for complex procedures, and the performance of its integrated
network have consistently produced superior clinical outcomes and cost
performance.
Transaction Details
UnitedHealth Group intends to acquire 90 percent of the 359 million
outstanding common shares of Amil for approximately $4.9 billion in
cash. This includes realizable Brazilian tax benefits worth an estimated
present value of $600 million, bringing the effective equity purchase
price to approximately $4.3 billion.
The purchase will be completed in two steps. Upon Brazilian regulatory
approval, expected in the fourth quarter of 2012, UnitedHealth Group
will purchase approximately 60 percent of the outstanding shares from
controlling shareholders and management and, in the first half of 2013,
will advance a tender offer to purchase approximately 30 percent from
public shareholders. Amil’s founder, Dr. Bueno, and his partner, Dr.
Dulce Pugliese, currently control approximately 70 percent of the shares
and will retain the remaining 10 percent for at least five years.Amil’s
CEO has further committed to investing approximately $470 million in
UnitedHealth Group shares and holding those shares for the same five
year term.
The combination is expected to be slightly accretive to UnitedHealth
Group’s earnings per share in 2013. UnitedHealth Group expects its debt
to total capital ratio to rise temporarily to approximately 36 percent
at the end of the year, but return to below 35 percent by the end of the
second quarter of 2013. UnitedHealth Group remains committed to the
forward development of its dividend policy. Its share repurchase program
will continue, paced to accommodate acquisition funding and capital
ratio objectives.
Amil’s Founder Continues to Lead Company and
Joins UnitedHealth’s Board
Amil’s founder, Dr. Edson Bueno, will continue to lead the company as
chairman and CEO, and the experienced Amil leadership team will continue
in their current positions. In addition, Dr. Bueno will bring his
experience and knowledge of international health care and integrated
care systems as a new member of UnitedHealth Group’s board of directors
upon the transaction’s close.
Richard Burke, chairman of the UnitedHealth Group board of directors
said, "A highly trained and experienced physician and talented
entrepreneur with deep expertise across the continuum of care, Dr. Bueno
will be a strong addition to our board of directors. He is highly
respected throughout Brazil, Latin America and in global health care
circles."
UnitedHealth Group Preliminary Third Quarter
Results
UnitedHealth Group net earnings for the third quarter 2012 are expected
to be a least $1.45 per share, with medical enrollment growth of over
650,000 people in the quarter and Optum clearly on its growth pace for
the quarter and year. Medical costs remained well managed again this
quarter. A full update on UnitedHealth Group’s third quarter earnings
and expectations for the remainder of 2012 will be provided on its third
quarter earnings call scheduled for October 16.
Presentation Available; Analyst/Investor
Conference Call Scheduled
A presentation summarizing the Brazilian market and Amil’s position and
results is available on the Investors page of UnitedHealth Group’s
website at www.unitedhealthgroup.com
Senior members of UnitedHealth Group and Amil’s management teams will
discuss the new partnership with analysts and investors in a public
conference call on October 8, 2012 at 8:45 a.m., Eastern Daylight Time.
UnitedHealth Group will have an audio webcast from, and will post a copy
of management’s remarks on the Investors page of its website at www.unitedhealthgroup.com.
Investors can access the call at 866-952-1907 (domestic) and
785-424-1826 (international), passcode UNH1008. The Company recommends
calling approximately 10-15 minutes before the start of the call. A
replay of the call will be available for seven days and can be accessed
at 800-677-6124 (domestic) and 402-220-0664 (international).
About Amil
Amil Participacoes S.A. is the largest healthcare organization in
Brazil, according to the Brazilian managed care regulator (ANS),
currently assisting more than 5 million people in the states of Sao
Paulo, Rio de Janeiro, Parana, Minas Gerais, Pernambuco, Bahia, Rio
Grande do Norte and the Distrito Federal. The Company has the largest
provider network in the country, including over 44,000 physicians; 3,300
hospitals; 11,000 outpatient facilities; and 12,000 laboratories and
diagnostic imaging centers. Amil also owns one of the largest private
hospital networks in Brazil, with 22 hospitals and 2 others under
construction. Amil, which began its activities in 1978, offers a wide
range of healthcare and dental plans for small, medium and large
companies, as well as plans for individuals from all income segments,
offering its members access to carefully selected healthcare service
providers.
About UnitedHealth Group
UnitedHealth Group (UNH) is a diversified health and well-being
company dedicated to helping people live healthier lives and making
health care work better. With headquarters in Minnetonka, Minnesota,
UnitedHealth Group offers a broad spectrum of products and services
through two business platforms: UnitedHealthcare, which provides health
care coverage and benefits services; and Optum, which provides
information and technology-enabled health services. Through its
businesses, UnitedHealth Group serves more than 75 million people
worldwide. For more information, visit UnitedHealth Group at www.unitedhealthgroup.com.
Forward-Looking Statements
This press release may contain statements, estimates, projections,
guidance or outlook that constitute "forward-looking" statements as
defined under U.S. federal securities laws. Generally the words
"believe," "expect," "intend," "estimate," "anticipate," "plan,"
"project," "should" and similar expressions identify forward-looking
statements, which generally are not historical in nature. These
statements may contain information about financial prospects, economic
conditions and trends and involve risks and uncertainties. We caution
that actual results could differ materially from those that management
expects, depending on the outcome of certain factors, including
potential failure to account for all material revenues, income, costs
and expenses that may affect our estimated earnings per share result for
the third quarter of 2012; failure to complete or receive anticipated
benefits of the Amil acquisition; our ability to generate sufficient
funds to maintain our quarterly dividend payment cycle or to continue
repurchasing shares of our common stock; and foreign currency
translation fluctuations and changes in capital markets conditions, our
capital requirements or our estimated results of operations that may
result in debt to capital ratio that is lower or higher than we
anticipated.
SOURCE: UnitedHealth Group
UnitedHealth Group
Investors:
John Penshorn, (952) 936-7214
Media:
Don Nathan, (952) 936-1885
or
Amil
Investors:
Erwin Kleuser, +55 (21) 3805-1155
Media:
Euro Comunicacao, (21) 3204-3204
and
CDN Comunicacao, (11) 4084-4800
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