Market Overview

UnitedHealth To Buy Diplomat Pharmacy For $300M

UnitedHealth To Buy Diplomat Pharmacy For $300M

Diplomat Pharmacy (NYSE: DPLO) shares are trading lower on Monday after the company received a $4 per share acquisition offer from UnitedHealth Group's (NYSE: UNH) OptumRx.

Optum is UnitedHealth Group's pharmacy services unit and said it would buy Diplomat Pharmacy for about $303 million. Diplomat's stock closed Friday's session at $5.81 per share with a market cap at about $441 million.

"Diplomat has a long track record of providing specialty pharmacy and infusion services but has encountered operating difficulties over the last few years," Cantor Fitzgerald analyst Steven Halper wrote in a note. "...The entrance into the PBM market has not panned out as the company probably had hoped. That said, we view the acquisition as a solid move for UNH from both a strategic and financial standpoint."

Diplomat shares were trading down 31.67% at $3.97 in Monday’s pre-market session. The stock has a 52-week high of $16.53 and a 52-week low of $2.43.

Diplomat's stock has crashed twice in 2019 amid warnings the company could not continue as a going concern. Shares fell from around $13.70 to $5.87 in late February, and again from $6.20 to $3.10 in early November.

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Latest Ratings for UNH

Dec 2020SVB LeerinkMaintainsOutperform
Dec 2020Morgan StanleyMaintainsOverweight
Dec 2020Raymond JamesMaintainsStrong Buy

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