LONDON, UK / ACCESSWIRE / September 15, 2017 / Pro-Trader Daily takes a look at the latest corporate events and news making the headlines for Centene Corp. (NYSE: CNC), following which we have published a free report that can be viewed by signing up at http://protraderdaily.com/optin/?symbol=CNC. The Company announced on September 13, 2017, that it has struck an agreement to acquire Fidelis Care for $3.75 billion. Following the acquisition, Fidelis Care will become Centene's health plan in New York State. For immediate access to our complimentary reports, including today's coverage, register for free now at:

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Fidelis Care's acquisition will expand Centene's national leadership in government sponsored healthcare with a leadership position in New York, and put Centene in the country's four largest managed care states by membership - California, Florida, New York, and Texas.

Both Organizations Missions Fully Aligned in terms of Promoting Health through High Quality, Accessible Services

Michael F. Neidorff, Chairman, President and CEO of Centene, stated that Centene's and Fidelis Care's missions are fully aligned in terms of promoting health through high quality, accessible care and services for all and advocating for health policy that accords true dignity and respect for all people, especially the underserved. Michael added that through this transaction, the Companies can further enhance the well-being of Fidelis Care's members and continue to build linkages and systems for the coordination of care and services among healthcare, behavioral, and social services while doing so at an appropriate level of cost.

Fidelis Care to Gain from Centene's Comprehensive, Medical Management, Wellness and Care Management Systems

Rev. Patrick J. Frawley, CEO of Fidelis Care, stated that the Company is looking forward to working closely with Centene's management and to take advantage of their comprehensive, state of the art technology and medical management, wellness and care management systems. Rev. Patrick added that Fidelis Care is excited for the opportunities this combination will create for all of all stakeholders, including members, in terms of continuing the Company's mission of providing access to high-quality care, provider partners, and employees.

Benefits of the Transaction

  • Solidifies Centene's Position as Largest Medicaid Managed Care Organization: Centene expects to generate 2018 pro-forma total revenues of over $60 billion, thereby solidifying its position as the largest Medicaid managed care organization in the country.

  • Provide Centene Leadership Position in State Sponsored Business: The acquisition will provide Centene with a leadership position in New York's Medicaid and other State sponsored businesses, Medicare Advantage and dual eligible programs, as well as the Qualified Health Plan and Essential Plan.

  • Highly Accretive to Earnings: The transaction is expected to generate immediate accretion to 2018 GAAP earnings per share. The Company expects to achieve $25 million of pre-tax cost savings in 2018 and $100 million run-rate savings in 2019, resulting from the reduced medical costs through the use of Centene's systems and medical management programs, integration of a range of specialty services and efficiencies in general and administrative (G&A).

  • Leveraging Centene's Capabilities: Centene has made investments in the suite of specialty services under envolve, the TruCare case management platform, the Centelligence data and analytics tools, and few more. The deal will help in bringing these assets to New York for further enhancing the existing capabilities of Fidelis Care.

Leadership

Post acquisition, Rev. Patrick J. Frawley will continue to lead Fidelis Care as CEO. Centene will continue to be headquartered in Queens with operations throughout the state, including Albany, Buffalo, Rochester, and Syracuse. The Company will welcome Fidelis Care's more than 4,000 dedicated team members to the Centene family.

Financial Details

Centene is likely to fund the transaction with $2.3 billion of new equity, including share consideration, and $1.6 billion of new long-term debt. The Company has secured the full $3.75 billion in committed bridge financing.

Centene expects that its strong balance sheet and the additional cash flow resulting from the acquisition will allow the Company to maintain its credit rating and the ability to deleverage on an accelerated basis.

Approval from Regulatory Bodies

The transaction, expected to close in Q1 2018, is subject to certain closing conditions and receipt of New York regulatory approvals, including approvals under the New York Not-for-Profit Corporation Law.

About Fidelis Care

Established in 1993, Fidelis Care provides quality, affordable health insurance coverage for children and adults of all ages and at all stages of life. Through a Statewide network of nearly 70,000 providers, the Company serves more than 1.6 million members in all 62 counties, making Fidelis Care one of the largest health plans of its kind in New York State.

Last Close Stock Review

Centene's share price finished yesterday's trading session at $95.92, falling 2.28%. A total volume of 2.07 million shares have exchanged hands, which was higher than the 3-month average volume of 1.43 million shares. The Company's stock price soared 21.39% in the last three months, 39.83% in the past six months, and 44.98% in the previous twelve months. Additionally, the stock skyrocketed 69.74% since the start of the year. Shares of the Company have a PE ratio of 21.24 and currently have a market cap of $16.46 billion.

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