Summary
Centene Corporation (CNC) filed an 8-K on May 10, 2005, to report the completion of its acquisition of the Medicaid assets of SummaCare, Inc., a subsidiary of Summa Health System. This acquisition, initially agreed upon on January 10, 2005, was effective as of May 1, 2005. The transaction involved a cash payment of approximately $21 million and the issuance of 318,735 shares of Centene's common stock. A portion of the cash consideration, $10 million, was financed through Centene's revolving credit facility. This acquisition marks an expansion for Centene in the Medicaid managed care sector. The company has also disclosed that it will file a Form S-3 registration statement to permit the resale of the newly issued shares. The report also details the utilization of its revolving credit facility, noting that $10 million was drawn down for this acquisition, bringing the total outstanding borrowings under the agreement to $40 million. The credit facility has an expiration date of September 14, 2009.
Key Highlights
- 1Completion of acquisition of SummaCare, Inc.'s Medicaid assets for approximately $21 million in cash and 318,735 shares of common stock.
- 2Acquisition effective May 1, 2005, following an agreement on January 10, 2005.
- 3$10 million of the cash purchase price funded by a draw on Centene's revolving credit facility.
- 4Total outstanding borrowings under the revolving credit facility now stand at $40 million.
- 5The revolving credit facility has an expiration date of September 14, 2009.
- 6Centene will file a Form S-3 registration statement for the resale of shares issued in the acquisition.