Surgical Care Affiliates, Inc.
Robbins Arroyo LLP: Acquisition of Surgical Care Affiliates, Inc. (SCAI) by UnitedHealth Group Incorporated (UNH) May Not Be in Shareholders’ Best Interests
Robbins Arroyo LLP is investigating the proposed acquisition of Surgical Care Affiliates, Inc. (NASDAQGS: SCAI) by UnitedHealth Group Incorporated (NYSE: UNH). On January 9, 2017, the two companies announced the signing of an Agreement and Plan of Reorganization pursuant to which Surgical Care Affiliates will combine with OptumCare, a member of the UnitedHealth Group. Under the terms of the agreement, outstanding shares of Surgical Care Affiliates common stock will be acquired for a fixed price of $57.00 to be funded between 51% to 80% with UnitedHealth Group common stock and the remainder in cash, with the final percentage to be determined at UnitedHealth Group’s option.
Is the Proposed Acquisition Best for Surgical Care Affiliates and Its Shareholders?
Robbins Arroyo LLP’s investigation focuses on whether the board of directors at Surgical Care Affiliates is undertaking a fair process to obtain maximum value and adequately compensate its shareholders.
As an initial matter, the $57.00 merger consideration represents a premium of only 16.90% based on Surgical Care Affiliates’ closing price on January 6, 2017. This premium is significantly below the average one day premium of nearly 47.01% for comparable transactions within the past five years. Further, the $57.00 merger consideration is significantly below the target price of $58.00 set by an analyst at SunTrust Robinson Humphrey on July 19, 2016.
On November 1, 2016, Surgical Care Affiliates reported strong earnings results for its third quarter 2016. Surgical Care Affiliates reported net operating revenue of $322.8 million for the three months ended September 30, 2016, a 25.2% increase from the same period of the prior year. Surgical Care Affiliates has also beaten analyst estimates for revenue in three of the past four consecutive quarters. In commenting on these results, Surgical Care Affiliates Chief Executive Officer and Chairman of the board Andrew Hayek remarked, “We are pleased with our clinical, strategic and financial performance. Patient care is our first priority, and our success is driven by our outstanding physicians and teammates, who continue to achieve strong clinical quality and patient satisfaction results. From a strategic standpoint, we continue to partner with health plans, medical groups and health systems, and our development pipeline remains strong. We are grateful to our physicians and teammates across the country who are dedicated to outstanding patient care and to building our SCA community.”
In light of these facts, Robbins Arroyo LLP is examining Surgical Care Affiliates’ board of directors’ decision to sell the company now rather than allow shareholders to continue to participate in the company’s continued success and future growth prospects.
Surgical Care Affiliates shareholders have the option to file a class action lawsuit to ensure the board of directors obtains the best possible price for shareholders and the disclosure of material information.
Surgical Care Affiliates shareholders interested in information about their rights and potential remedies can contact attorney Darnell R. Donahue at (800) 350-6003, or you can complete the form below and we will contact you directly.