October 8, 2012 / 2:40 PM / 7 years ago

TEXT-S&P: UnitedHealth rating unaffected by Amil purchase

Oct 8 - Standard & Poor's Ratings Services said today that UnitedHealth
Group Inc.'s (A/Stable/A-1) definitive agreement to purchase Amil
Participacoes SA does not result in any rating action. Amil, based in
Sao Paulo, is the biggest private health insurance company in Latin America.
Amil is the leading health insurer in a relatively fragmented market that is in
the early stage of consolidation. We consider this transaction to be consistent
with UnitedHealth's growth strategy, which is supported by a combination of
organic development and acquisition. The $4.9 billion purchase price exceeds 15%
of UnitedHealth's shareholder equity as of June 30, 2012, which represents a
material sum in our view. We expect the deal to be at least partly funded with
new debt and for pro-forma debt leverage to be moderately more than 35% for a
short period. UnitedHealth has significant deal-integration experience, and we
consider this transaction to be manageable. We expect Amil's contribution to
consolidated cash flow to be modest in the near term but increase meaningfully
in the intermediate term due to the growth and consolidation of Amil's market.
In our view, key risks relate to the sustainability of economic development in
Brazil and the 
country's receptiveness to foreign investment.
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below