Centene to Acquire MediPlan Corporation; Ohio Health Plan Adds 13,000 Medicaid Lives
January 31 2006 - 6:00AM
Business Wire
Centene Corporation (NYSE: CNC) announced today that its Ohio
subsidiary, Buckeye Community Health Plan (BCHP), has signed a
definitive agreement to acquire MediPlan Corporation from the
Aultman Health Foundation, a not-for-profit healthcare delivery
system. The transaction will add approximately 13,000 Medicaid
members in the Canton market to the 58,100 Ohio members already
covered by BCHP and includes long-term provider contracts with
Aultman Hospital and related Aultman providers. Michael F.
Neidorff, Chairman and Chief Executive Officer of Centene, stated,
"This in-market acquisition will expand our solid footprint by
adding Stark County to the regions in which we operate, and will
increase our market share in Ohio. Moreover, we are pleased to be
able to begin a long-term partnership with Aultman, a well-regarded
service provider in the Ohio community. We believe that this
partnership will strongly position us to participate in the
upcoming Ohio Medicaid expansion process." "After careful
consideration and evaluation, Aultman Health Foundation, which is
required to follow mandates set by the State of Ohio, determined
that Buckeye Community Health Plan best matches our commitment to
offer the highest quality of care for our Medicaid members," said
Edward J. Roth, President and Chief Executive Officer of Aultman
Health Foundation. "Medicaid members will not experience a
disruption in their healthcare coverage, benefits or services
during this transition." Under the terms of the agreement, Centene
will pay a purchase price of approximately $8.5 million in cash at
closing. Subject to regulatory approvals and other closing
conditions, the acquisition is expected to close by the beginning
of the third quarter 2006. Centene estimates that the acquisition
will generate total revenues of approximately $15 million to $16
million in 2006 and will provide accretion to earnings per share of
up to $0.02 in 2006. "This transaction is consistent with our
acquisition criteria, including our internal rate of return
requirements, and is consistent with our methodical approach to
growth for 2006 and beyond," Neidorff noted. About Centene
Corporation Centene Corporation provides multi-line managed care
programs and related services to individuals receiving benefits
under Medicaid, including Supplemental Security Income (SSI), and
the State Children's Health Insurance Program (SCHIP). The Company
operates health plans in Indiana, Kansas, Missouri, New Jersey,
Ohio, Texas and Wisconsin. In addition, the Company contracts with
other healthcare organizations to provide specialty services,
including behavioral health, disease management, nurse triage,
pharmacy benefit management and treatment compliance. Information
regarding Centene is available via the Internet at www.centene.com.
About Aultman Health Foundation Aultman Health Foundation is a
not-for-profit health system located in Canton, Ohio. The system
encompasses Aultman Hospital, a 682-bed teaching hospital with a
medical staff of approximately 650 physicians and more than 5,000
employees. The system also includes four community-based health
centers that house outpatient surgery, immediate care, diagnostic
services and therapy programs, as well as AultCare, the largest
hospital/physician-based Preferred Provider Organization in
Northeastern Ohio. Aultman Health Foundation focuses on six areas
of care consisting of Heart, Cancer, Women and Children's Services,
Neurosurgery, Orthopedics, and Emergency and Trauma Services. These
clinical services continue to be recognized by national
organizations such as J.D. Power and Associates and the National
Research Corporation (NRC). The second and fourth paragraphs of
this press release contain forward-looking statements that relate
to future events and future financial performance of Centene;
subsequent events and developments may cause the Company's
estimates to change. The Company disclaims any obligation to update
this forward-looking financial information in the future. Matters
subject to forward-looking statements involve known and unknown
risks and uncertainties, including economic, regulatory,
competitive and other factors that may cause Centene's or its
industry's actual results, levels of activity, performance or
achievements to be materially different from any future results,
levels of activity, performance or achievements expressed or
implied by these forward-looking statements. Actual results also
may differ from projections or estimates due to a variety of
important factors, including the timing of the completion of the
acquisition of MediPlan Corporation, Centene's ability to
successfully integrate and manage such acquisition, Centene's
ability to accurately predict and effectively manage health
benefits and other operating expenses, competition, changes in
healthcare practices, changes in federal or state laws or
regulations, inflation, provider contract changes, new
technologies, reduction in provider payments by governmental
payors, major epidemics, disasters and numerous other factors
affecting the delivery and cost of healthcare. The expiration,
cancellation or suspension of Centene's Medicaid managed care
contracts by state governments would also negatively affect
Centene.
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