WellCare Health Plans, Inc. (NYSE:WCG) announced today that it has entered into an agreement with Care1st Health Plan, an affiliate of Blue Shield of California, to acquire its subsidiaries Care1st Health Plan Arizona, Inc. and ONECare by Care1st Health Plan of Arizona, Inc. (together, “Care1st Arizona”), managed care companies that provide Medicaid and Medicare benefits to approximately 114,000 beneficiaries in Maricopa and Pima counties, Arizona’s largest geographic service areas.
“Our acquisition of Care1st Arizona provides us with an opportunity to expand our footprint into Arizona’s growing Medicaid and Medicare markets,” said Ken Burdick, WellCare’s chief executive officer. “Care1st Arizona is a well-regarded, quality health plan that has served government-sponsored programs in Arizona for more than 13 years. Its focus on community-based relationships and integrated delivery of medical care and social services aligns with our approach to providing improved health outcomes for low-income families, children, the disabled, seniors and individuals with complex medical needs.”
Under the terms of the agreement, WellCare will acquire Care1st Arizona from Care1st Health Plan for approximately $157.5 million, inclusive of statutory capital and subject to certain adjustments. The transaction is expected to be funded with available cash on hand and to close by the first quarter of 2017, pending regulatory approvals and other customary closing conditions. The transaction is also expected to be accretive to earnings per diluted share in the first year following the close of the acquisition. WellCare expects to provide additional details regarding the acquisition during its third quarter 2016 earnings conference call that is scheduled for November 1, 2016.
Bass, Berry & Sims PLC served as legal advisor to WellCare. Cain Brothers served as financial advisor and Kutak Rock LLP served as legal counsel to Blue Shield of California and Care1st Arizona.