Advisory Board Healthcare Business to Merge With Optum for $1.3B

The merger is yet another sign that in healthcare, it's all about the data.

In the latest sign that it’s all about the data in healthcare, the Advisory Board announced a merger with Optum, the health services and data analytics company that is part of United Health Group. Optum will pay $1.3 billion to acquire Advisory Board’s strategic healthcare advisory services as part of a split that sends the company’s education arm elsewhere, to Vista Equity Partners, for $1.55 billion.

The Optum merger was announced by the Advisory Board in a statement.

“By working together, The Advisory Board Company and Optum will provide deeper strategic insights and practical operational value to clients who are looking for ways to enhance care and respond to the changing market dynamics of the healthcare system,” said Larry Renfro, CEO of Optum.

Adding Advisory Board’s healthcare services strengthens the research capabilities of the Optum unit that already moved into pharmacy benefits management, and accounts for larger shares of UnitedHealth Group’s earnings, according to Bloomberg. UnitedHealthcare, another unit, was the first of the large national insurers to pull completely out of the exchanges under the Affordable Care Act, after aggressive expansion resulted in large losses.

This latest transaction is yet another sign of the real quest among traditional and nontraditional players in healthcare—from pharmaceutical companies to tech giants like Google and Apple—the data harvest.

From electronic health records to claims data to the readings of Fitbits to social media posts, companies are seeking to gobble up data sets and figure out later how to mine them for health information and behavior. UnitedHealth’s claims database has long been a gold standard for use by researchers, so the addition of the Advisory Board resources will only bolster its status.

The board of directors of The Advisory Board Company unanimously approved the merger, and must be approved by the company’s stockholders, as well as clearance by US antitrust officials. Closing is anticipated in late 2017 or early 2018.