Sun Life Financial has reached an agreement to acquire Pinnacle Care International in a deal worth $85 million. The transaction should close in mid-2021, subject to the satisfaction of customary closing conditions and other regulatory approvals.
Pinnacle Care will join Sun Life (SLF) as a leading medical intelligence and health care navigation provider. The company has 20 years of experience in helping people access initial and secondary medical opinions.
The acquisition should expand Sun Life’s Stop-Loss & Health unit beyond the traditional model and help improve the spectrum of care experience and outcomes.
The merging of the two companies will create a new dynamic that should help improve care outcomes, which in turn will reduce costs that often arise from misdiagnosis and ineffective treatment.
“Bringing in PinnacleCare’s innovative approach to help people at each step of the health-care process will help us improve the experience of our members so they feel supported and cared for when they need it most,” stated Jen Collier, Senior Vice President of Stop-Loss & Health.
Sun Life shares are up 20% year-to-date after a 2% slide in 2020. (See Sun Life stock analysis on TipRanks)
BMO Capital’s analyst Tom Mackinnon maintains a Buy rating on Sun Life Financial. The analyst has set the stock price target at C$75, which implies approximately 13% upside potential to current levels.
According to the analyst, Sun Life is poised to report earnings per share of $1.27 when it reports its second-quarter financial results.
Wall Street is cautiously optimistic about Sun Life going by the Moderate Buy consensus rating. Six analysts rate the stock a Buy while three suggest a Hold. The average analyst price target at $55.76 implies approximately 4.6% upside potential to the current level.
Sun Life scores a “Perfect 10” on the TipRanks’ Smart Score rating system, suggesting that it has the potential to beat market expectations.
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