Aetna to Acquire Prodigy Health Group
April 28 2011 - 5:55AM
Business Wire
Aetna (NYSE: AET) today announced that it has entered into an
agreement to acquire Prodigy Health Group, the nation’s largest
independent third party administrator (TPA) of self-funded health
care plans. Headquartered in New York City, Prodigy Health Group
has approximately 600,000 medical members, approximately 450,000
pharmacy members, and operates in 15 states.
Aetna will acquire Prodigy Health Group from Prodigy Health
Holdings, LLC, whose majority owner is One Equity Partners. The
purchase price is approximately $600 million. Aetna expects to
finance the acquisition with available resources. The transaction
is subject to customary closing conditions, including
Hart-Scott-Rodino antitrust regulatory approval. The transaction is
expected to close in the second half of 2011 and, as financed, is
projected to be neutral to Aetna’s financial results in 2011 and
modestly accretive in 2012.
“The acquisition of Prodigy Health Group is in keeping with
Aetna’s strategy of diversifying its product offerings and adding
new revenue streams,” said Mark T. Bertolini, chairman, CEO and
president. “Prodigy extends Aetna’s reach into the third-party
administrator business while providing a separate option under the
Prodigy brands that addresses affordability and quality for
middle-sized and small businesses and customers who are primarily
price-focused.”
Joseph M. Zubretsky, senior executive vice president and CFO,
added, “We believe that there are a number of positive synergies to
be gained from our acquisition of Prodigy Health Group, including
leveraging our provider networks and PBM capabilities to grow
membership and enhance our ability to develop customized networks
in accountable care models. The acquisition leverages many of
Aetna’s existing capabilities and is projected to have attractive
returns.”
Prodigy Health Group operates under three business names:
Meritain Health for its TPA benefits business; American Health for
its medical management business; and Scrip World for its pharmacy
benefits management business. Following the close of the
transaction, Prodigy Health Group will be a subsidiary of Aetna and
will operate as a separate business. Prodigy Health Group will
maintain its current management and operating structure and compete
under its own brands.
About Aetna
Aetna is one of the nation’s leading diversified health care
benefits companies, serving approximately 33.8 million people with
information and resources to help them make better informed
decisions about their health care. Aetna offers a broad range of
traditional, voluntary and consumer-directed health insurance
products and related services, including medical, pharmacy, dental,
behavioral health, group life and disability plans, and medical
management capabilities and health care management services for
Medicaid plans. Our customers include employer groups, individuals,
college students, part-time and hourly workers, health plans,
governmental units, government-sponsored plans, labor groups and
expatriates. For more information, see www.aetna.com. To learn more
about Aetna’s innovative online tools, visit
www.aetnatools.com.
CAUTIONARY STATEMENT – Certain information in this press release
is forward-looking, including but not limited to, the projected
timing of the closing of the transaction, the projected impact of
the transaction on Aetna’s 2011 and 2012 financial results, the
potential synergies to be gained from the transaction and the
projected returns from the transaction. Forward-looking information
is based on management's estimates, assumptions and projections,
and is subject to significant uncertainties and other factors, many
of which are beyond Aetna's and Prodigy Health Group’s control.
Important risk factors could cause actual future results and other
future events to differ materially from those currently estimated
by management. Those risk factors include, but are not limited to:
the ability to successfully develop and integrate the business
operations described herein in a timely and cost-efficient manner
(including obtaining the required regulatory approvals on a timely
basis to close the transaction); the ability to realize projected
revenue; the ability to retain current customers of Prodigy Health
Group and Prodigy Health Group’s current provider networks and grow
its customer and provider network base in the future; retention of
key personnel of Prodigy Health Group; and adverse government
regulation or review or enhanced government enforcement.
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