8-KOther Events

CENTENE CORP 8-K Report (Dec 16, 2002)

Filed December 16, 2002For Securities:CNC

Summary

Centene Corporation (CNC) has announced the completion of its acquisition of 80% of the outstanding capital stock of University Health Plans, Inc. (UHP) on December 1, 2002. This strategic move expands Centene's presence in New Jersey's Medicaid managed care market. UHP, established in 1994, serves approximately 50,000 Medicaid members across 15 counties in New Jersey and has a network of over 7,500 providers. The acquisition was conducted at arm's length, with Centene paying approximately $8.7 million for its majority stake. Centene will manage UHP's operations, which will continue to operate under the University Health Plans name, aligning with Centene's strategy of providing localized services. An investor rights agreement is in place, granting Centene the option to acquire the remaining 20% of UHP's shares by September 1, 2003, or through a future exchange in 2005.

Key Highlights

  • 1Centene Corporation acquired an 80% stake in University Health Plans, Inc. (UHP) for approximately $8.7 million.
  • 2UHP primarily serves Medicaid members in New Jersey, covering approximately 50,000 individuals.
  • 3The acquisition is expected to expand Centene's footprint in the New Jersey Medicaid market.
  • 4Centene will manage UHP's operations, maintaining the UHP brand for localized services.
  • 5An investor rights agreement allows Centene to purchase the remaining 20% of UHP's shares.
  • 6The State of New Jersey Department of Banking and Insurance approved the acquisition terms.
  • 7The transaction was accounted for as a purchase.

Frequently Asked Questions

This acquisition is significant as it allows Centene to expand its Medicaid managed care services into New Jersey, acquiring a substantial existing member base and provider network in UHP.

Centene paid approximately $8.7 million for an 80% stake in UHP. The purchase price was calculated based on $250 per enrolled risk member as of December 1, 2002, with adjustments. Centene funded the purchase from working capital.

Centene has the right to purchase the remaining 20% of UHP from the University of Medicine and Dentistry of New Jersey for $2.6 million (based on member count) anytime before September 1, 2003. If this option is not exercised, the shares will be exchanged in December 2005 for either Centene common stock or cash, valued at the greater of UHP's enterprise value or $2.6 million.

UHP will continue to operate under the name University Health Plans. Centene will manage UHP's operations in a manner consistent with its other Medicaid-only health plan subsidiaries, maintaining a focus on localized services, support, and branding.