~ Centene to sell Magellan Rx to Prime
Therapeutics ~
~ Centene to sell PANTHERx to The Vistria
Group, General Atlantic, and Nautic Partners ~
~ Centene expects to receive aggregate
proceeds of approximately $2.8
billion ~
~ Two significant milestones in value creation
program and ongoing portfolio review ~
ST.
LOUIS, May 5, 2022 /PRNewswire/ -- Centene
Corporation (NYSE: CNC) announced today that it has signed a
definitive agreement to sell Magellan Rx to Prime Therapeutics LLC
(Prime) and a separate definitive agreement to sell PANTHERx Rare
to a consortium of The Vistria Group, General Atlantic, and Nautic
Partners. Subject to customary purchase price adjustments, Centene
expects to receive aggregate proceeds of approximately $2.8 billion from the transactions.
"These transactions demonstrate significant progress in our
ongoing portfolio review and represent key milestones in our value
creation plan," said Sarah London,
CEO of Centene. "Last year, Centene announced our strategic plan to
exit the Pharmacy Benefit Management (PBM) space. Magellan Rx is a
valuable asset, and under different ownership we believe it will
continue to thrive as a next-generation pharmacy solutions
organization. Likewise, PANTHERx is a leader in rare and specialty
pharmacy, and we are confident this transaction will position the
company to effectively grow while ensuring patients get the
critical, specialized care they deserve."
Magellan Rx
- Magellan Rx is a comprehensive pharmacy solutions organization
with leading capabilities in specialty drug management, Medicaid
administration, and comprehensive pharmacy benefits
management.
- Centene acquired Magellan Rx in January
2022 as part of its acquisition of Magellan Health,
Inc.
- The sale of Magellan Rx is subject to U.S. federal antitrust
clearance, receipt of applicable regulatory approvals and
satisfaction of other customary closing conditions and is expected
to close in the fourth quarter of 2022.
- In the sale of Magellan Rx, Allen & Company LLC and
Evercore are serving as financial advisors to Centene, and Skadden,
Arps, Slate, Meagher & Flom LLP is serving as its legal
counsel. Solomon Partners is serving as exclusive financial advisor
and placement agent to Prime and McDermott
Will & Emery and Fox Rothschild LLP are serving as its
legal counsel.
PANTHERx
- PANTHERx is one of the largest and fastest growing specialty
and rare pharmacies in the United
States.
- Centene acquired PANTHERx in December
2020.
- The sale of PANTHERx is subject to U.S. federal antitrust
clearance, receipt of applicable regulatory approvals and
satisfaction of other customary closing conditions and is expected
to close in the next two to four months.
- In the sale of PANTHERx, Barclays is serving as financial
advisor to Centene, and Bass Berry Sims, PLC is serving as its
legal counsel.
Centene intends to use the majority of the net proceeds from the
sales to repurchase stock and the balance to reduce debt.
Each of the transactions is expected to be neutral to slightly
accretive to Centene's Adjusted Earnings Per Share in the 12-month
period post-closing.
About Centene Corporation
Centene Corporation, a
Fortune 25 company, is a leading healthcare enterprise that is
committed to helping people live healthier lives. The Company takes
a local approach – with local brands and local teams – to provide
fully integrated, high-quality, and cost-effective services to
government-sponsored and commercial healthcare programs, focusing
on under-insured and uninsured individuals. Centene offers
affordable and high-quality products to nearly 1 in 15 individuals
across the nation, including Medicaid and Medicare members
(including Medicare Prescription Drug Plans) as well as individuals
and families served by the Health Insurance Marketplace, the
TRICARE program, and individuals in correctional facilities. The
Company also serves several international markets, and contracts
with other healthcare and commercial organizations to provide a
variety of specialty services focused on treating the whole person.
Centene focuses on long-term growth and value creation as well as
the development of its people, systems, and capabilities so that it
can better serve its members, providers, local communities, and
government partners.
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, https://investors.centene.com/.
Forward-Looking Statements
All statements, other than statements of current or
historical fact, contained in this press release 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). Centene (the Company, our, or we) intends such
forward-looking statements to be covered by the safe-harbor
provisions for forward-looking statements contained in the Private
Securities Litigation Reform Act of 1995, and we are including this
statement for purposes of complying with these safe-harbor
provisions. In particular, these statements include, without
limitation, statements about our future operating or financial
performance, market opportunity, value creation strategy,
competition, expected activities in completed and future
acquisitions, including statements about the impact of our recently
completed acquisition of Magellan Health (the Magellan
Acquisition), other recent and future acquisitions and
dispositions, investments and the adequacy of our available cash
resources. These forward-looking statements reflect our current
views with respect to future events and are based on numerous
assumptions and assessments made by us in light of our experience
and perception of historical trends, current conditions, business
strategies, operating environments, future developments and other
factors we believe 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 our or our
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 press release are based on information available
to us on the date hereof. Except as may be otherwise required by
law, we undertake no obligation to update or revise the
forward-looking statements included in this press release, whether
as a result of new information, future events or otherwise, after
the date hereof. 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: our ability to accurately predict
and effectively manage health benefits and other operating expenses
and reserves, including fluctuations in medical utilization rates
due to the impact of COVID-19; the risk that the election of new
directors, changes in senior management, and inability to retain
key personnel may create uncertainty or negatively impact our
ability to execute quickly and effectively; uncertainty as to
the expected financial performance of the combined company
following the recent completion of the Magellan Acquisition; the
possibility that the expected synergies and value creation from the
Magellan Acquisition or the acquisition of WellCare Health Plans,
Inc.(the WellCare Acquisition) (or other acquired businesses) will
not be realized, or will not be realized within the respective
expected time periods; disruption from the integration of the
Magellan Acquisition or from the integration of the WellCare
Acquisition, unexpected costs, or similar risks from other
acquisitions we may announce or complete from time to time,
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; the risk that the closing conditions, including
applicable regulatory approvals, for the pending sales of Magellan
Rx and PANTHERx may be delayed or not obtained; a downgrade of the
credit rating of our indebtedness; competition; membership and
revenue declines or unexpected trends; changes in healthcare
practices, new technologies, and advances in medicine; increased
healthcare costs; changes in economic, political or market
conditions; 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 ACA) and any regulations enacted thereunder that may
result from changing political conditions, the new administration
or judicial actions; rate cuts or other payment reductions or
delays by governmental payors and other risks and uncertainties
affecting our government businesses; our ability to adequately
price products; tax matters; disasters or major epidemics; changes
in expected contract start dates; provider, state, federal, foreign
and other contract changes and timing of regulatory approval of
contracts; the expiration, suspension, or termination of our
contracts with federal or state governments (including, but not
limited to, Medicaid, Medicare, TRICARE or other customers); the
difficulty of predicting the timing or outcome of legal or
regulatory proceedings or matters, including, but not limited to,
our ability to resolve claims and/or allegations made by states
with regard to past practices, including at Envolve Pharmacy
Solutions, Inc. (Envolve), as our pharmacy benefits manager (PBM)
subsidiary, within the reserve estimate we recorded in 2021 and on
other acceptable terms, or at all, or whether additional claims,
reviews or investigations relating to our PBM business will be
brought by states, the federal government or shareholder litigants,
or government investigations; timing and extent of benefits from
strategic value creation initiatives, including the possibility
that these initiatives will not be successful, or will not be
realized within the expected time periods; challenges to our
contract awards; cyber-attacks or other privacy or data security
incidents; the exertion of management's time and our 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; changes in expected closing dates, estimated purchase
price and accretion for acquisitions; restrictions and limitations
in connection with our indebtedness; our ability to maintain or
achieve improvement in 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; availability of debt and equity financing, on terms
that are favorable to us; inflation; foreign currency fluctuations
and risks and uncertainties discussed in the reports that Centene
has filed with the Securities and Exchange Commission. 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 our business operations, financial
condition and results of operations, in our filings with the
Securities and Exchange Commission (SEC), including our 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, we
cannot give assurances with respect to our future performance,
including without limitation our ability to maintain adequate
premium levels or our ability to control our future medical and
selling, general and administrative costs.
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SOURCE Centene Corporation