Centene to Acquire National Individual Health Insurance Provider Celtic Insurance Company
March 18 2008 - 5:00PM
Business Wire
Centene Corporation (NYSE: CNC) announced today it has executed
definitive agreements to acquire Celtic Group, Inc., the parent
company of Celtic Insurance Company (�Celtic�). Pending regulatory
approval, the acquisition is expected to close in the third quarter
of 2008. Celtic, a privately-owned nationwide health insurance
carrier based in Chicago, Illinois, provides high-quality,
affordable health insurance to individual customers and their
families. The purchase price for the transaction is $80 million,
subject to certain transaction adjustments, and will be funded
through borrowings under Centene's existing $300 million credit
facility. �With this transaction, Centene will be uniquely
positioned to partner with state customers focused on managing
health care costs. This acquisition also enables us to offer a full
range of healthcare solutions for the rising number of uninsured.
When combined with the strong presence in our current states, we
can address a full spectrum of uninsured opportunities,� said
Michael F. Neidorff, Chairman and Chief Executive Officer, Centene
Corporation. �We believe that by creating a national focus to cover
more of the uninsured, this will lead to significant growth
opportunities in both the Medicaid managed care and individual
health insurance sectors for Centene. This transaction is
consistent with our product diversification strategy to add
complementary capabilities that allow us to meet the evolving needs
of our state customers and to offer a broad range of coverage
solutions customized to the unique needs of each state.� Neidorff
continued, �We believe the states will benefit from a solution that
combines our expertise in delivering low-cost, quality healthcare
with market-driven, affordable and individual health insurance to
Americans nationwide. Joining forces with Celtic underscores our
goal of ensuring that all Americans have access to cost-effective,
high-quality, healthcare.� Frederick J. Manning, Celtic�s chairman
and chief executive officer, said, �Celtic has been a trusted name
in the individual health insurance market for almost 30 years and
we feel fortunate to partner with an organization that shares our
commitment to increasing access to quality healthcare for all.
Together, our employees can be proud of the fact they will help
address one of the nation�s most intractable challenges: providing
health coverage to the underserved.� Celtic will continue to
operate under its current brand and the operations will remain at
its Chicago headquarters. Mr. Manning will remain with the
organization as President and CEO of Celtic and Executive Vice
President of Centene and will report directly to Mr. Neidorff. The
transaction is expected to be neutral to earnings per share in
2008. Additional details regarding the transaction will be
disclosed on Wednesday, March 19th, 2008, at 2:00 PM (Eastern
Time), when Mr. Neidorff will present at the Lehman Brothers 11th
Annual Global Healthcare Conference, which will be held March
18-20, 2008, at the Loews Miami Beach Hotel in Miami. The
presentation will be available as a live, audio web cast at:
http://cc.talkpoint.com/LEHM002/031808a_jw/default.asp?entity=Centene,
after which time it will be archived for replay for 90 days. Celtic
was advised by Goldman, Sachs & Co. Centene Corporation was
advised by Allen & Company LLC. About Centene Corporation
Centene Corporation is a leading multi-line healthcare enterprise
that provides programs and related services to individuals
receiving benefits under Medicaid, including the State Children�s
Health Insurance Program (SCHIP) and Supplemental Security Income
(SSI). The Company operates health plans in Arizona, Georgia,
Indiana, New Jersey, Ohio, South Carolina, Texas and Wisconsin. In
addition, the Company contracts with other healthcare and
commercial organizations to provide specialty services including
behavioral health, life and health management, long-term care,
managed vision, nurse triage, pharmacy benefits management and
treatment compliance. Information regarding Centene is available
via the Internet at www.centene.com. About Celtic Insurance
Chicago-based Celtic Insurance Company is one of the country�s
leading nationwide individual health insurance providers. With
approximately 120 employees, Celtic Insurance currently offers
coverage to approximately 31,000 individuals nationwide and is
licensed in every state except New York. Some of the products in
the Celtic product portfolio are: The CeltiCare II Health Plan for
individuals and families, the CelticSaver HSA Health Plan, the
Celtic Short-term Health Plan and the Celtic Basic Health Plan, a
low-cost major medical plan offering higher deductibles to control
premium cost. For more information on Celtic, please visit
www.celtic-net.com. The information provided in this press release
contains 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. Readers are cautioned that
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 may
differ from projections or estimates due to a variety of important
factors, including 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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