UnitedHealth To Acquire Definity For $300 Million

Definity, a privately held company founded in 1998, does not publish detailed financial statements, but the company says it is profitable and is on track to generate $100 million in revenue in 2005.

Definity has accepted UnitedHealths acquisition offer to get access to UnitedHealths provider network, health account management systems and financial backing, according to Definity Chief Executive Tony Miller, who won the 2001 Innovators Award from what is now Americas Health Insurance Plans, Washington, for his effort to organize Definity.

"The assets and support of UnitedHealth Group will allow Definity to maintain its leadership position and better serve its customers," Miller says in a statement.

One of the venture capital firms that has been investing in Definity from the beginning, Alta Partners, San Francisco, is pointing to the deal as evidence that investors in some venture-backed firms are having an easier time cashing in.

The UnitedHealth deal "is a terrific outcome for all parties involved," says Dan Janney, an Alta Partners managing director who serves on the Definity board.

Reproduced from National Underwriter Edition, December 3, 2004. Copyright 2004 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.