Summary
Centene Corporation (CNC) announced the completion of its acquisition of WellCare Health Plans, Inc. on January 23, 2020. This significant merger, originally announced in March 2019, involved a stock and cash transaction where WellCare shareholders received 3.38 shares of Centene common stock and $120.00 in cash per WellCare share. The acquisition immediately makes WellCare a wholly owned subsidiary of Centene, marking a major step in consolidating market presence within the health insurance sector, particularly for government-sponsored healthcare programs. In conjunction with the merger, Centene also completed exchange offers for WellCare's outstanding senior notes. A substantial portion of WellCare's 5.25% Senior Notes due 2025 and 5.375% Senior Notes due 2026 were exchanged for new Centene notes and cash, with the remaining balances significantly reduced. This refinancing strategy aims to streamline the capital structure of the combined entity. Additionally, the company announced an increase in its Board of Directors size to 12 and the appointment of two new directors, William Trubeck and James Dallas, bringing enhanced financial and IT expertise.
Key Highlights
- 1Completion of the acquisition of WellCare Health Plans, Inc. on January 23, 2020.
- 2Transaction involved a mix of Centene common stock (3.38 shares per WellCare share) and cash ($120.00 per WellCare share).
- 3WellCare Health Plans, Inc. is now a wholly owned subsidiary of Centene Corporation.
- 4Exchange offers for WellCare's senior notes were completed, significantly reducing the outstanding principal of these notes.
- 5New Centene senior notes were issued in exchange for WellCare notes: $1,145,791,000 of 5.25% Senior Notes due 2025 and $747,218,000 of 5.375% Senior Notes due 2026.
- 6Centene's Board of Directors was expanded to 12 members with the addition of William Trubeck and James Dallas.
- 7Financial and IT expertise added to the board with the appointments of Mr. Trubeck (former CFO) and Mr. Dallas (former CIO).