The St. Louis-based Centene Corporation, a Fortune 100 company, has acquired WellCare Health Plans, Inc. 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 companies announced on March 27.
The transaction, which was unanimously approved by the boards of both companies, will create “a premier healthcare enterprise focused on government-sponsored healthcare programs and a leader in Medicaid, Medicare and the Health Insurance Marketplace,” they stated.
WellCare brings to Centene a high-quality Medicare platform and further extends Centene's Medicaid offerings. The combined company will be able “to provide access to more comprehensive and differentiated solutions across more markets with a continued focus on affordable, high-quality, culturally-sensitive healthcare services,” the companies stated.
The enterprise will have approximately 22 million members across all 50 states in the U.S. The companies project 2019 revenues of approximately $97 billion and $5 billion in EBITDA. Those members will include more than 12 million Medicaid and approximately 5 million Medicare members (including Medicare Prescription Drug Plan), as well as individuals served in the Health Insurance Marketplace and the TRICARE program.
The combined company will operate 31 National Committee for Quality Assurance-accredited health plans across the country and will have increased exposure to government-sponsored healthcare solutions through WellCare's Medicare Advantage and Medicare Prescription Drug Plans.
The companies stated that 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.”
"With the addition of WellCare, we expect to bolster and diversify our product offerings, increase our scale and have access to new markets, which will in turn, enable us to continue investing in technology and better serve members with innovative programs designed to meet their needs,” said Michael F. Neidorff, Centene's chairman and chief executive officer.
“We have long admired the WellCare organization and together look forward to building on our mission of transforming the health of our communities, one person at a time."
The board of the combined company will consist of 11 members, nine of whom will be from the board of Centene and two of whom will be from the board of WellCare. After the close of the transaction, Michael Neidorff will lead the combined company as Chairman and Chief Executive Officer.
"This transformational combination creates a leading healthcare enterprise that is committed to helping people live healthier lives through a localized approach and provides access to high-quality healthcare through a wide range of affordable health solutions," Neidorff said.