Anthem, Inc. ANTM recently announced its deal to acquire myNEXUS, a technology-enabled company that manages home-based care for payors. However, financial terms of the transaction have been kept under wraps. It is worth mentioning that the deal is expected to close in the second quarter of the year subject to closing conditions.
Notably, the transaction will not have an impact on the company’s EPS guidance for this year.
Currently, myNEXUS caters to around 1.7 million Medicare Advantage members across 20 states through its wide network of home health providers and nurse agencies.
Following completion of the deal, myNEXUS will function as a wholly-owned unit of Anthem and will be joining Anthem’s Diversified Business Group.
Rationale Behind the Deal
The deal is a time opportune one as more and more people are seeking in-home care to reduce exposure to the virus. The acquisition is expected to provide better in-home healthcare facilities, which in turn will lead to better health outcomes of individuals.
Anthem has taken quite a few measures to enhance its in-home business over the past year years. In 2018, the leading health insurer bought Aspire Health, a non-hospice, community-based palliative care provider. The company closed the deal with an aim of delivering optimum patient satisfaction via home-based care, reducing medical costs in the process.
Under the previous administration, the company and a number of its affiliated health plans had also gained traction from home care-related supplemental benefits flexibility for Medicare Advantage (MA) granted by the U.S. Centers for Medicare & Medicaid Services (CMS).
After closure of the deal, the company will be able to leverage its current infrastructure to provide at-home care, thereby reducing overall costs.
Notably, myNEXUS is being bought from an investor group led by WindRose Health Investors, a New York-based health care private equity firm.
The deal is also in sync with Anthem’s long-term strategy to provide integrated, whole person multi-site care to members. Time and again, the company has resorted to acquisitions and collaborations for enhancing its capabilities. The company’s Beacon Health’s buyout, the largest independently held behavioral health organization in the country, should strengthen its position in the space. The company also purchased AmeriBen recently, which helped it increase commercial and specialty business enrollment. All these initiatives bode well.
This latest announcement also highlights the trend of payors investing in home-based care to provide better healthcare. The trend has been there for quite some time to combat financial challenges.
One of its peers, Humana Inc. HUM has also been taking measures to boost its homehealth care business line.
Shares of this Zacks Rank #4 (Sell) healthcare provider have gained 53.1% in a year compared with the industry’s rally of 35.3%.
Other companies in the same space, Centene Corporation CNC and Select Medical Holdings Corporation SEM have gained 24.2% and 106.5%, respectively, in the same time frame.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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