Summary
Centene Corporation (CNC) announced on January 14, 2005, a significant strategic acquisition of the Medicaid assets of Summa Health System's subsidiary, SummaCare, Inc. This transaction is set to bolster Centene's presence in Ohio by integrating approximately 39,000 new Medicaid members into its existing Buckeye Community Health Plan (BCHP), which already serves 23,500 members in the state. The acquisition is valued at approximately $31 million, comprising $22 million in cash and $9 million in Centene common stock. The deal is expected to close in the second quarter of 2005, pending regulatory approvals and the successful negotiation of provider contracts to ensure continuity of care for the acquired members. This move signifies Centene's continued expansion strategy within the Medicaid managed care market, aiming to strengthen its operational footprint and member base in key states.
Key Highlights
- 1Centene Corp. (CNC) to acquire Medicaid assets of SummaCare, Inc. from Summa Health System.
- 2Acquisition expected to add approximately 39,000 new Medicaid members to Centene's Ohio subsidiary, Buckeye Community Health Plan (BCHP).
- 3Total acquisition cost is approximately $31 million, structured as $22 million in cash and $9 million in Centene common stock.
- 4The consideration includes a per-member payment of $560 cash and 8.5046 shares of common stock.
- 5Closing is anticipated in the second quarter of 2005, subject to regulatory approvals and provider contract confirmations.
- 6Centene will file a shelf registration statement on Form S-3 for the resale of the issued common stock.
- 7Potential additional cash payment if the stock price is below $28.22 on the effective date of the registration statement.