MemberHealth, Inc. announced today that it has entered into a definitive agreement under which it would be acquired by Universal American Financial Corp. (“Universal American”) of Rye Brook, NY (NASDAQ: UHCO).
The purchase price will be approximately $630 million, consisting of 55 percent in cash and 45 percent in Universal American common stock valued at $20 per share, plus potential performance-based consideration. The transaction, which is expected to close late in the third quarter of 2007, is subject to customary closing conditions, including approval by the shareholders of Universal American and appropriate regulatory approvals. Universal American expects the transaction to be accretive to pro forma earnings immediately following the closing.
MemberHealth is sponsor of CCRx, a leading national Medicare Part D Prescription Drug Plan with more than 1.1 million beneficiaries. Universal American is a specialty health and life insurance holding company. Through its family of companies, Universal American offers a broad array of health insurance and managed care products primarily to the senior population, including Medicare Advantage and Medicare Supplement plans.
Charles E. Hallberg, president and CEO of MemberHealth, said the transaction is good for seniors because Universal American and MemberHealth will add more competition to the industry and will work together to form new plans that focus on prevention, wellness and taking medicines correctly to stay healthy.
“Both MemberHealth and Universal American share the philosophy of keeping seniors healthy and have programs to support such initiatives. That’s what made Universal American an attractive partner for us — they strongly believe in empowering physicians and pharmacists in healthcare decisions,” Hallberg said. “This is an exciting opportunity to combine both companies’ philosophies and create new health programs that can meet an expanded range of needs for Medicare beneficiaries.”
The transaction is expected to create significant strategic benefits, including the opportunity for Universal American to build upon MemberHealth’s successful pharmacy-driven business model through its ongoing alliance with the National Community Pharmacists Association (“NCPA”) and to introduce additional value-oriented health products and services into the market. The acquisition also is expected to result in enhanced distribution opportunities for Universal American’s extensive agent field force.
Richard A. Barasch, chairman and Chief Executive Officer of Universal American, said the transaction creates unique opportunities for not only the company, but pharmacists and seniors.
“We are excited about bringing MemberHealth into the Universal American family, as it will expand our Part D business while providing our customers with greater access to community pharmacists, many of whom are the main providers of health services in the rural areas we serve,” Barasch said. “With the addition of MemberHealth, we will manage Medicare Advantage, Part D, or other insurance coverage for more than 2.1 million Medicare beneficiaries and will administer prescription drug benefits for another 3.5 million consumers through the MemberHealth PBM.”
For people currently enrolled in MemberHealth’s CCRx Medicare Part D plans in 2007, their benefits, premiums, co-payments, network pharmacies, customer service numbers and ID cards will remain the same. For pharmacies currently in the MemberHealth network, claims submission procedures, customer service numbers and reimbursement rates will remain the same.
About MemberHealth: MemberHealth, Inc. (MHRx) is a leading national Medicare Part D sponsor, offering Medicare prescription drug plans in 50 states, District of Columbia, Puerto Rico and the U.S. Virgin Islands. MemberHealth has more than 60,000 pharmacies in its pharmacy network and covers 98 percent of the top 100 medications taken by Medicare beneficiaries. MHRx established its reputation as a visionary provider of prescription drug benefits for insured and self-insured groups and discount prescription programs across the country, by focusing on strengthening the relationships between patients, their pharmacists and physicians, which ensures that patients can take medicines with confidence and save money. For more information on MHRx, please visit our Web sites at www.mhrx.com or www.communitycarerx.com.
About Universal American: Universal American Financial Corp. is a specialty health and life insurance holding company. Through our family of companies, we offer a broad array of health insurance and managed care products and services, primarily to the growing senior population. Universal American is included in the NASDAQ Financial-100 Index, the Russell 2000 Index and the Russell 3000 Index. For more information on Universal American, please visit our Web site at www.uafc.com.
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