Summary
Centene Corporation announced the successful completion of its acquisition of substantially all of the assets of New York State Catholic Health Plan, Inc. d/b/a Fidelis Care New York, on July 2, 2018. This significant transaction, originally agreed upon in September 2017 and amended in June 2018, marks a key strategic expansion for Centene, particularly within the New York state health insurance market. The acquisition was financed through a combination of existing cash reserves, the proceeds from a previously announced equity offering, and a $1.8 billion senior notes issuance.
Key Highlights
- 1Centene Corporation has officially completed the acquisition of Fidelis Care, a New York-based health plan, on July 2, 2018.
- 2The acquisition was financed using available cash, net proceeds from an equity offering, and $1.8 billion in 5.375% Senior Notes due 2026.
- 3The company utilized an escrow arrangement for the bond proceeds, which were released upon completion of the acquisition and regulatory approvals.
- 4Centene assumed obligations related to the $1.8 billion in senior notes following a merger of its subsidiary, Centene Escrow I Corporation, with Centene.
- 5The filing incorporates by reference the audited and unaudited financial statements of Fidelis Care for periods including 2016, 2017, and the first quarter of 2018.
- 6Pro forma combined financial information for Centene and Fidelis Care as of and for the year ended December 31, 2017, and for the three months ended March 31, 2018, is also incorporated.
Frequently Asked Questions
This 8-K filing is primarily to announce the completion of Centene Corporation's acquisition of substantially all of the assets of Fidelis Care. It confirms the closing of the transaction and provides details on the financing and related agreements.
The acquisition was financed through a combination of Centene's available cash, the net proceeds from a previously disclosed equity offering, and $1.8 billion in aggregate principal amount of 5.375% Senior Notes due 2026 issued by its subsidiary, Centene Escrow I Corporation.
The filing incorporates by reference the audited consolidated financial statements of Fidelis Care for the years ended December 31, 2017 and 2016, as well as the unaudited consolidated financial statements for the period ended March 31, 2018, and the corresponding three-month periods. It also includes pro forma combined financial information.
The $1.8 billion in Senior Notes were issued by Centene's subsidiary and the proceeds were held in escrow. Upon completion of the acquisition and release of regulatory approvals, these funds, along with other financing sources, were used to fund the cash consideration for the acquisition. Centene subsequently assumed the obligations under these notes.