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Spun off from McKesson (MCK) in 2020, Change Healthcare (CHNG) is the leading independent provider of health care IT services. The company offers software and analytics solutions in support of provider network management, payments, and other administrative healthcare functions that aim to enhance clinical decision-making and improve quality of care.

A year ago, Change announced that it would combine with Optum, a tech-focused division of UnitedHealth (UNH), in a transaction whereby CHNG holders would receive $25.75 per share in cash.

Facing an intense lobby from the American Hospital Association (AHA), parties to the deal have delayed the transaction more than once, most recently pushing the deadline to April 5, 2022 and promising the Department of Justice no deal would happen before Feb. 22.

We continue to think the antitrust risks are appropriately discounted, given a greater than 20% spread between the market and merger prices, while fiscal 2022 and 2023 consensus EPS estimates yield inexpensive respective forward P/E ratios of 14 and 13. Deal or no deal, we like CHNG.

A sizable short-term return is available if the union is consummated and a strong competitive position exists if not, with the AHA saying, “The types of services offered by OptumInsight and Change are a must have for health care providers to navigate byzantine insurance reimbursement and ensure accurate and timely payment.”