Summary
Centene Corporation (CNC) announced on March 24, 2016, the successful completion of its acquisition of Health Net, Inc. This strategic move, valued at approximately $5.3 billion in a combination of cash and stock, significantly expands Centene's presence and capabilities in the managed care sector. The transaction was financed through a mix of existing cash, proceeds from senior notes issued earlier in 2016, and a new $1 billion unsecured revolving credit facility. This acquisition positions Centene for enhanced growth and market share. The integration of Health Net is expected to create a larger, more diversified entity with expanded offerings, particularly in government-subsidized health plans. Investors should monitor the integration process and any future synergies or challenges that may arise from this substantial merger.
Key Highlights
- 1Completion of the acquisition of Health Net, Inc. for approximately $5.3 billion in cash and Centene common stock.
- 2Financing for the acquisition included cash, proceeds from $2.4 billion in senior notes issued in February 2016, and a new $1 billion revolving credit facility.
- 3Centene entered into a new $1 billion unsecured multi-currency revolving credit facility with Wells Fargo, maturing March 24, 2021.
- 4The existing $500 million revolving facility was terminated upon entering the new credit agreement.
- 5Health Net's outstanding senior notes were assumed by Centene's subsidiary, Merger Sub II, following the merger.
- 6Vicki B. Escarra was appointed to Centene's Board of Directors and its Audit Committee.
- 7Audited financial statements for Health Net as of December 31, 2015 and 2014, are included as an exhibit.