ST. LOUIS and TAMPA, Fla., May 23,
2019 /PRNewswire/ -- Centene Corporation (NYSE: CNC)
("Centene" or the "Company") and WellCare Health Plans, Inc. (NYSE:
WCG) ("WellCare") today announced the filing of the definitive
joint proxy statement and prospectus with the U.S. Securities and
Exchange Commission in connection with Centene's pending
acquisition of WellCare. The joint proxy statement is being mailed
to Centene and WellCare stockholders on or about May 24, 2019.
The Centene Special Meeting of stockholders to vote on the
shares of Centene common stock to be issued in connection with the
transaction is scheduled to take place on June 24, 2019, at 10 a.m.
Central Time and will be held at Centene Plaza, 7700 Forsyth
Boulevard, St. Louis, Missouri.
All stockholders of record of Centene common stock as of the close
of business on May 8, 2019, will be
entitled to vote their shares either in person or by proxy at the
Special Meeting.
The WellCare Special Meeting of stockholders to vote on the
transaction is scheduled to take place on June 24, 2019, at 11 a.m.
Eastern Time and will be held at the offices of Kirkland
& Ellis LLP, 601 Lexington Avenue, New York, New York 10022. All stockholders of
record of WellCare common stock as of the close of business on
May 22, 2019, will be entitled to
vote their shares either in person or by proxy at the Special
Meeting.
The Centene and WellCare Boards of Directors unanimously
recommend that stockholders vote "FOR" the proposals to
approve the merger agreement, as described in more detail in the
definitive joint proxy statement.
As previously announced on March 27,
2019, Centene will acquire WellCare in a cash and stock
transaction for $305.39 per share
based on Centene's closing stock price on March 26, 2019 for a total enterprise value of
$17.3 billion. The combination of
Centene and WellCare will create the premier healthcare enterprise
focused on government sponsored healthcare, and the combined
company will be well positioned to better serve members, help them
achieve better health outcomes, and drive growth.
Highlights of the transaction include:
- Delivering Attractive Earnings Accretion. The
transaction is expected to generate adjusted diluted earnings per
share accretion of approximately mid-single digits in year two
following closing, with long-term growth opportunities and cost
reduction across markets and products.
- Driving Long-Term Stockholder Value Creation. The
combination is expected to generate approximately $500 million of annual net cost synergies by year
two and pre-tax annual long-term run-rate net synergies of more
than $700 million.
- Building on Centene's Strong Track Record of Financial and
Operational Outperformance. The addition of WellCare is an
important step in Centene's short- and long-term growth strategy
and is expected to build on Centene's strong track record of
stockholder value creation. Centene has delivered total stockholder
return over the five and 10 year periods ending 2018 of 259% and
1,230%, respectively, outperforming the S&P 500 and its
peers.
- Delivering Significant Benefits to Members and Government
Partners. The combined company would be the leader in
government-sponsored healthcare with increased scale and
diversification both geographically and in its managed care service
offerings, and enhance access to high-quality services for members.
Its more than 23 million members across 50 states would benefit
from its affordable and high-quality products.
- Supporting Shared Commitment to Local Communities.
Centene and WellCare share strong commitments to the communities in
which their employees and members live and work. The combined
company will enhance its already robust efforts to address the
social determinants of health such as food insecurity, housing
instability, homelessness, unemployment, lack of access to
transportation and other non-medical barriers to health.
Centene and WellCare continue to expect that the transaction
will close by the first half of 2020, subject to approval by
Centene and WellCare stockholders, clearance under the Hart-Scott
Rodino Act, receipt of required state regulatory approvals and
other customary closing conditions.
Centene stockholders who need assistance in completing the proxy
card, need additional copies of the proxy materials, or have
questions regarding the Centene Special Meeting may contact
Centene's proxy solicitors:
Morrow Sodali, LLC
(800) 662-5200
(toll-free)
(203) 658-9400 (collect)
Email: cnc@morrowsodali.com
or
Saratoga Proxy Consulting LLC
(888)
368-0379 (toll-free)
(212) 257-1311 (collect)
Email: info@saratogaproxy.com
WellCare stockholders who need assistance in completing the
proxy card, need additional copies of the proxy materials, or have
questions regarding the WellCare Special Meeting may contact
WellCare's proxy solicitor:
Innisfree M&A Incorporated
(888)
750-5834 (toll-free)
(212) 750-5833 (collect)
About Centene
Centene Corporation, a Fortune 100 company, is a diversified,
multi-national healthcare enterprise that provides a portfolio of
services to government sponsored and commercial healthcare
programs, focusing on under-insured and uninsured individuals. Many
receive benefits provided under Medicaid, including the State
Children's Health Insurance Program (CHIP), as well as Aged, Blind
or Disabled (ABD), Foster Care and
Long-Term Services and Supports (LTSS), in addition to other
state-sponsored programs, Medicare (including the Medicare
prescription drug benefit commonly known as "Part D"), dual
eligible programs and programs with the U.S. Department of Defense.
Centene also provides healthcare services to groups and individuals
delivered through commercial health plans. Centene operates local
health plans and offers a range of health insurance solutions. It
also contracts with other healthcare and commercial organizations
to provide specialty services including behavioral health
management, care management software, correctional healthcare
services, dental benefits management, commercial programs,
home-based primary care services, life and health management,
vision benefits management, pharmacy benefits management, specialty
pharmacy and telehealth services.
Centene uses its investor relations website to publish important
information about the Company, including information that may be
deemed material to investors. Financial and other information about
Centene is routinely posted and is accessible on Centene's investor
relations website, http://www.centene.com/investors.
About WellCare Health Plans, Inc.
Headquartered in
Tampa, Fla., WellCare Health
Plans, Inc. (NYSE: WCG) focuses primarily on providing
government-sponsored managed care services to families, children,
seniors and individuals with complex medical needs primarily
through Medicaid, Medicare Advantage and Medicare Prescription Drug
Plans, as well as individuals in the Health Insurance Marketplace.
WellCare serves approximately 6.3 million members nationwide as of
March 31, 2019. For more information
about WellCare, please visit the company's website at
www.wellcare.com.
Cautionary Statement on Forward-Looking Statements of
Centene
All statements, other than statements of current or
historical fact, contained in this communication are
forward-looking statements. Without limiting the foregoing,
forward-looking statements often use words such as "believe,"
"anticipate," "plan," "expect," "estimate," "intend," "seek,"
"target," "goal," "may," "will," "would," "could," "should," "can,"
"continue" and other similar words or expressions (and the negative
thereof). In particular, these statements include, without
limitation, statements about Centene's future operating or
financial performance, market opportunity, growth strategy,
competition, expected activities in completed and future
acquisitions, including statements about the impact of Centene's
proposed acquisition of WellCare Health Plans, Inc. (the "WellCare
Transaction"), Centene's recent acquisition (the "Fidelis Care
Transaction") of substantially all the assets of New York State Catholic Health Plan, Inc.,
d/b/a Fidelis Care New York ("Fidelis
Care"), investments and the adequacy of Centene's available
cash resources.
These forward-looking statements reflect Centene's current views
with respect to future events and are based on numerous assumptions
and assessments made by us in light of Centene's experience and
perception of historical trends, current conditions, business
strategies, operating environments, future developments and other
factors Centene believes appropriate. By their nature,
forward-looking statements involve known and unknown risks and
uncertainties and are subject to change because they relate to
events and depend on circumstances that will occur in the future,
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. These statements are not guarantees of future
performance and are subject to risks, uncertainties and
assumptions.
All forward-looking statements included in this filing are based
on information available to us on the date of this communication.
Except as may be otherwise required by law, Centene undertakes no
obligation to update or revise the forward-looking statements
included in this communication, whether as a result of new
information, future events or otherwise, after the date of this
filing. You should not place undue reliance on any forward-looking
statements, as actual results may differ materially from
projections, estimates, or other forward-looking statements due to
a variety of important factors, variables and events including, but
not limited to, the following: (i) the risk that regulatory or
other approvals required for the WellCare Transaction may be
delayed or not obtained or are obtained subject to conditions that
are not anticipated that could require the exertion of management's
time and Centene's resources or otherwise have an adverse effect on
Centene; (ii) the risk that Centene's stockholders do not approve
the issuance of shares of Centene common stock in the WellCare
Transaction; (iii) the risk that WellCare's stockholders do not
adopt the merger agreement; (iv) the possibility that certain
conditions to the consummation of the WellCare Transaction will not
be satisfied or completed on a timely basis and accordingly the
WellCare Transaction may not be consummated on a timely basis or at
all; (v) uncertainty as to the expected financial performance of
the combined company following completion of the WellCare
Transaction; (vi) the possibility that the expected synergies and
value creation from the WellCare Transaction will not be realized,
or will not be realized within the expected time period; (vii) the
exertion of management's time and Centene's resources, and other
expenses incurred and business changes required, in connection with
complying with the undertakings in connection with any regulatory,
governmental or third party consents or approvals for the WellCare
Transaction; (viii) the risk that unexpected costs will be incurred
in connection with the completion and/or integration of the
WellCare Transaction or that the integration of WellCare will be
more difficult or time consuming than expected; (ix) the risk that
potential litigation in connection with the WellCare Transaction
may affect the timing or occurrence of the WellCare Transaction or
result in significant costs of defense, indemnification and
liability; (x) a downgrade of the credit rating of Centene's
indebtedness, which could give rise to an obligation to redeem
existing indebtedness; (xi) unexpected costs, charges or expenses
resulting from the WellCare Transaction; (xii) the possibility that
competing offers will be made to acquire WellCare; (xiii) the
inability to retain key personnel; (xiv) disruption from the
announcement, pendency and/or completion of the WellCare
Transaction, including potential adverse reactions or changes to
business relationships with customers, employees, suppliers or
regulators, making it more difficult to maintain business and
operational relationships; and (xv) the risk that, following the
WellCare Transaction, the combined company may not be able to
effectively manage its expanded operations.
Additional factors that may cause actual results to differ
materially from projections, estimates, or other forward-looking
statements include, but are not limited to, the following: (i)
Centene's ability to accurately predict and effectively manage
health benefits and other operating expenses and reserves; (ii)
competition; (iii) membership and revenue declines or unexpected
trends; (iv) changes in healthcare practices, new technologies, and
advances in medicine; (v) increased healthcare costs, (vi) changes
in economic, political or market conditions; (vii) changes in
federal or state laws or regulations, including changes with
respect to income tax reform or government healthcare programs as
well as changes with respect to the Patient Protection and
Affordable Care Act and the Health Care and Education Affordability
Reconciliation Act, collectively referred to as the Affordable Care
Act ("ACA"), and any regulations enacted thereunder that may result
from changing political conditions or judicial actions, including
the ultimate outcome of the District Court decision in "Texas v.
United States of America"
regarding the constitutionality of the ACA; (viii) rate cuts or
other payment reductions or delays by governmental payors and other
risks and uncertainties affecting Centene's government businesses;
(ix) Centene's ability to adequately price products on federally
facilitated and state-based Health Insurance Marketplaces; (x) tax
matters; (xi) disasters or major epidemics; (xii) the outcome of
legal and regulatory proceedings; (xiii) changes in expected
contract start dates; (xiv) provider, state, federal and other
contract changes and timing of regulatory approval of contracts;
(xv) the expiration, suspension, or termination of Centene's
contracts with federal or state governments (including but not
limited to Medicaid, Medicare, TRICARE or other customers); (xvi)
the difficulty of predicting the timing or outcome of pending or
future litigation or government investigations; (xvii) challenges
to Centene's contract awards; (xviii) cyber-attacks or other
privacy or data security incidents; (xix) the possibility that the
expected synergies and value creation from acquired businesses,
including, without limitation, the Fidelis Care Transaction, will
not be realized, or will not be realized within the expected time
period; (xx) the exertion of management's time and Centene's
resources, and other expenses incurred and business changes
required in connection with complying with the undertakings in
connection with any regulatory, governmental or third party
consents or approvals for acquisitions, including the Fidelis Care
Transaction; (xxi) disruption caused by significant completed and
pending acquisitions, including, among others, the Fidelis Care
Transaction, making it more difficult to maintain business and
operational relationships; (xxii) the risk that unexpected costs
will be incurred in connection with the completion and/or
integration of acquisition transactions, including, among others,
the Fidelis Care Transaction; (xxiii) changes in expected closing
dates, estimated purchase price and accretion for acquisitions;
(xxiv) the risk that acquired businesses, including Fidelis Care, will not be integrated
successfully; (xxv) the risk that, following the Fidelis Care
Transaction, Centene may not be able to effectively manage its
expanded operations; (xxvi) restrictions and limitations in
connection with Centene's indebtedness; (xxvii) Centene's ability
to maintain the Centers for Medicare and Medicaid Services (CMS)
Star ratings and maintain or achieve improvement in other quality
scores in each case that can impact revenue and future growth;
(xxviii) availability of debt and equity financing, on terms that
are favorable to us; (xxxix) inflation; and (xxx) foreign currency
fluctuations.
This list of important factors is not intended to be exhaustive.
We discuss certain of these matters more fully, as well as certain
other factors that may affect Centene's business operations,
financial condition and results of operations, in Centene's filings
with the Securities and Exchange Commission (the "SEC"), including
the registration statement on Form S-4 filed by Centene with the
Securities and Exchange Commission on May
23, 2019 (the "Registration Statement"), and Centene's
Annual Report on Form 10-K, quarterly reports on Form 10-Q and
current reports on Form 8-K. Due to these important factors and
risks, Centene cannot give assurances with respect to Centene's
future performance, including without limitation Centene's ability
to maintain adequate premium levels or Centene's ability to control
its future medical and selling, general and administrative
costs.
Cautionary Statement on Forward-Looking Statements of
WellCare
All statements, other than statements of current
or historical fact, contained in this communication are
forward-looking statements. Without limiting the foregoing,
forward-looking statements often use words such as "believe,"
"anticipate," "plan," "expect," "estimate," "intend," "seek,"
"target," "goal," "may," "will," "would," "could," "should," "can,"
"continue" and other similar words or expressions (and the negative
thereof). Such forward-looking statements are intended to be
covered by the safe-harbor provisions for forward-looking
statements contained in the Private Securities Litigation Reform
Act of 1995, and this statement is included for purposes of
complying with these safe-harbor provisions. In particular, these
statements include, without limitation, statements about WellCare's
future operating or financial performance, market opportunity,
growth strategy, competition, expected activities in completed and
future acquisitions, including statements about the impact of the
Transaction, investments and the adequacy of WellCare's available
cash resources.
These forward-looking statements reflect WellCare's current
views with respect to future events and are based on numerous
assumptions and assessments made by WellCare in light of WellCare's
experience and perception of historical trends, current conditions,
business strategies, operating environments, future developments
and other factors WellCare believes appropriate. By their nature,
forward-looking statements involve known and unknown risks and
uncertainties and are subject to change because they relate to
events and depend on circumstances that will occur in the future,
including economic, regulatory, competitive and other factors that
may cause WellCare 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. These statements are not guarantees of future
performance and are subject to risks, uncertainties and
assumptions.
All forward-looking statements included in this filing are based
on information available to WellCare on the date of this
communication. Except as may be otherwise required by law, WellCare
undertakes no obligation to update or revise the forward-looking
statements included in this communication, whether as a result of
new information, future events or otherwise, after the date of this
filing. You should not place undue reliance on any forward-looking
statements, as actual results may differ materially from
projections, estimates, or other forward-looking statements due to
a variety of important factors, variables and events including, but
not limited to, the following: (i) the risk that regulatory or
other approvals required for the Transaction may be delayed or not
obtained or are obtained subject to conditions that are not
anticipated that could require the exertion of management's time
and WellCare's resources or otherwise have an adverse effect on
WellCare; (ii) the risk that Centene's stockholders do not
approve the issuance of shares of Centene common stock in the
Transaction; (iii) the risk that WellCare's stockholders do
not adopt the merger agreement; (iv) the possibility that
certain conditions to the consummation of the Transaction will not
be satisfied or completed on a timely basis and accordingly the
Transaction may not be consummated on a timely basis or at all;
(v) uncertainty as to the expected financial performance of
the combined company following completion of the Transaction;
(vi) the possibility that the expected synergies and value
creation from the Transaction will not be realized, or will not be
realized within the expected time period; (vii) the exertion
of management's time and WellCare's resources, and other expenses
incurred and business changes required, in connection with
complying with the undertakings in connection with any regulatory,
governmental or third party consents or approvals for the
Transaction; (viii) the risk that unexpected costs will be
incurred in connection with the completion and/or integration of
the Transaction or that the integration of WellCare will be more
difficult or time consuming than expected; (ix) the risk that
potential litigation in connection with the Transaction may affect
the timing or occurrence of the Transaction or result in
significant costs of defense, indemnification and liability;
(x) a downgrade of the credit rating of WellCare's
indebtedness, which could give rise to an obligation to redeem
existing indebtedness; (xi) unexpected costs, charges or
expenses resulting from the Transaction; (xii) the possibility
that competing offers will be made to acquire Centene;
(xiii) the inability to retain key personnel;
(xiv) disruption from the announcement, pendency and/or
completion of the Transaction, including potential adverse
reactions or changes to business relationships with customers,
employees, suppliers or regulators, making it more difficult to
maintain business and operational relationships; and (xv) the
risk that, following the Transaction, the combined company may not
be able to effectively manage its expanded operations.
Additional factors that may cause actual results to differ
materially from projections, estimates, or other forward-looking
statements include, but are not limited to, the following:
(i) WellCare's progress on top priorities such as integrating
care management, advocating for WellCare's members, building
advanced relationships with providers and government partners,
ensuring a competitive cost position, and delivering prudent,
profitable growth, (ii) WellCare's ability to effectively
identify, estimate and manage growth, (iii) the ability to
achieve accretion to WellCare's earnings, revenues or other
benefits expected, (iv) disruption to business relationships,
operating results, and business generally of WellCare,
(v) potential reductions in Medicaid and Medicare revenue,
(vi) WellCare's ability to estimate and manage medical
benefits expense effectively, including through its vendors,
(vii) WellCare's ability to negotiate actuarially sound rates,
especially in new programs with limited experience,
(viii) WellCare's ability to improve healthcare quality and
access, (ix) the appropriation and payment by state
governments of Medicaid premiums receivable, (x) the outcome
of any protests and litigation related to Medicaid awards,
(xi) the approval of Medicaid contracts by the Centers for
Medicare & Medicaid Services, (xii) any changes to
the programs or contracts, (xiii) WellCare's ability to
address operational challenges related to new business and
(xiv) WellCare's ability to meet the requirements of readiness
reviews.
This list of important factors is not intended to be exhaustive.
WellCare discusses certain of these matters more fully, as well as
certain other factors that may affect its business operations,
financial condition and results of operations, in its filings with
the Securities and Exchange Commission (the "SEC"), including
WellCare's Annual Report on Form 10-K, quarterly reports on Form
10-Q and current reports on Form 8-K. Due to these important
factors and risks, WellCare cannot give assurances with respect to
its future performance, including without limitation its ability to
maintain adequate premium levels or its ability to control its
future medical and selling, general and administrative costs.
Important Additional Information and Where to Find
It
In connection with the WellCare Transaction, on
May 23, 2019, Centene filed with the
SEC the Registration Statement, which included a prospectus with
respect to the shares of Centene's common stock to be issued in the
WellCare Transaction and a joint proxy statement for Centene's and
WellCare's respective stockholders (the "Joint Proxy Statement").
The SEC declared the Registration Statement effective on
May 23, 2019, and the Joint Proxy
Statement was first mailed to stockholders of Centene and WellCare
on or about May 24, 2019. Each of
Centene and WellCare may file other documents regarding the
WellCare Transaction with the SEC. This communication is not a
substitute for the Registration Statement, the Joint Proxy
Statement or any other document that Centene or WellCare may send
to their respective stockholders in connection with the WellCare
Transaction. INVESTORS AND SECURITY HOLDERS OF CENTENE AND WELLCARE
ARE URGED TO READ THE REGISTRATION STATEMENT, THE JOINT PROXY
STATEMENT AND ANY OTHER RELEVANT DOCUMENTS (INCLUDING ANY
AMENDMENTS OR SUPPLEMENTS THERETO) FILED WITH THE SEC CAREFULLY AND
IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY CONTAIN
OR WILL CONTAIN IMPORTANT INFORMATION ABOUT CENTENE, WELLCARE, THE
WELLCARE TRANSACTION AND RELATED MATTERS. Investors and security
holders of Centene and WellCare are able to obtain free copies of
the Registration Statement, the Joint Proxy Statement and other
documents (including any amendments or supplements thereto)
containing important information about Centene and WellCare through
the website maintained by the SEC at www.sec.gov. Centene and
WellCare make available free of charge at www.centene.com and
www.ir.wellcare.com, respectively, copies of materials they file
with, or furnish to, the SEC.
Participants In The Solicitation
Centene, WellCare and
certain of their respective directors, executive officers and
employees may be deemed to be participants in the solicitation of
proxies from the stockholders of Centene and WellCare in connection
with the WellCare Transaction.
Information about the directors and executive officers of
Centene is set forth in its Annual Report on Form 10-K for the
fiscal year ended December 31, 2018,
which was filed with the SEC on February 19,
2019, its proxy statement for its 2019 annual meeting of
stockholders, which was filed with the SEC on March 8, 2019, and on its website at
www.centene.com.
Information about the directors and executive officers of
WellCare is set forth in its Annual Report on Form 10-K for the
fiscal year ended December 31, 2018,
which was filed with the SEC on February 12,
2019, its proxy statement for its 2019 annual meeting of
stockholders, which was filed with the SEC on April 8, 2019, and on its website at
www.ir.wellcare.com.
Investors may obtain additional information regarding the
interest of such participants and a description of their direct and
indirect interests, by security holdings or otherwise, by reading
the Registration Statement, the Joint Proxy Statement and other
materials filed with the SEC in connection with the WellCare
Transaction. You may obtain these documents free of charge through
the website maintained by the SEC at www.sec.gov and from the
websites of Centene or WellCare as described above.
No Offer or Solicitation
This communication is for
informational purposes only and does not constitute, or form a part
of, an offer to sell or the solicitation of an offer to sell or an
offer to buy or the solicitation of an offer to buy any securities,
and there shall be no sale of securities, in any jurisdiction in
which such offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws of any such
jurisdiction. No offer of securities shall be made except by means
of a prospectus meeting the requirements of Section 10 of the
Securities Act of 1933, as amended, and otherwise in accordance
with applicable law.
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SOURCE Centene Corporation