Centene Corporation Announces Joint Venture With Group Practice Affiliates LLC, a Behavioral Healthcare Company; Acquires Assets of ScriptAssist, LLC, A Medication Compliance Company
Michael F. Neidorff, President and Chief Executive Officer of Centene, stated, "This joint venture brings us important expertise in the area of behavioral healthcare that will benefit our current Medicaid population and fits within our stated strategy to be a multi-line government services company. This strategic investment, together with our nurse triage line, supports our goal of being a high quality, low cost healthcare producer. It also helps us to demonstrate to states our ability to manage our medical expenses and to be recognized as part of the state's solution to their budget deficits. Today, 6% of our ambulatory care is behavioral health. Behavioral issues are often overlooked when patients are diagnosed; consequently, this investment will allow us to be proactive in an area that merits significant attention. Equally important, it will enable Centene to have a focused and specialized capability as we expand our SSI membership, a population that has a much larger, more chronic behavioral health component. John Tadich, our Senior Vice President of Specialty Companies, will oversee the development of our strategic entry into the specialty and behavioral health arena, working closely with GPA's seasoned management who will continue to run the day to day operations."
Steve Daniels, Chief Executive Officer of Group Practice Affiliates, LLC said, "We are excited about the opportunity to expand our relationship with Centene, bringing to it our behavioral healthcare expertise to enable both companies to provide better access and services to patients. Based upon our successful track record and the strength of our existing relationships, we believe that we will be able to continue to expand our business. Our business outside of Centene gives us financial diversity as well as the ability to manage the full array of behavioral problems."
Mr. Tadich commented, "Our current successful relationship with GPA gives us great confidence that we can develop an integrated healthcare strategy. There are numerous areas of overlap between behavioral and physical care that can be better coordinated with organizations such as GPA. Additionally, it will enable us to leverage our NurseWise(SM) triage program to provide access to a nurse 24 hours a day, 7 days a week."
The initial purchase price was $4.1 million, with an additional investment of up to $1.7 million to be made in June 2004 based on GPA's 2003 performance and other factors. After a three-year term of the joint venture, Centene will have the option to acquire the remaining interest in GPA based upon a pre-determined formula.
Neidorff concluded, "We currently estimate that this joint venture will add $11 million to $13 million in revenue and earnings of $0.02 to $0.03 per share in 2003."
In addition, Centene announced that it has acquired the assets of ScriptAssist, LLC, a medication compliance company, for $500,000. ScriptAssist uses various approaches and medical expertise to promote adherence to prescription drugs and is being integrated into Centene's NurseWise subsidiary.
As previously announced, Michael F. Neidorff, Centene's President and Chief Executive Officer, will present on Tuesday, March 4, 2003 at 2:30 pm Eastern Time at the Lehman Brothers Global Healthcare Conference. Mr. Neidorff intends to discuss these transactions briefly at this conference. The presentation will be available at www.lehman.com/conferences/healthcare2003invitation as a live audio webcast, and then on archive until March 11, 2003.
About Centene Corporation
Centene Corporation provides managed care programs and related services to individuals receiving benefits under Medicaid, including Supplemental Security Income (SSI), and the State Children's Health Insurance Program (SCHIP). Centene operates health plans in Wisconsin, Texas, Indiana and New Jersey. Information regarding Centene is available via the Internet at www.centene.com
About Group Practice Affiliates, LLP
GPA provides comprehensive behavioral health products and services to both Medicaid and commercial members through behavioral health networks, groups, schools, and programs to serve children, adolescents and adults in Arizona, California and Texas. In Arizona, GPA provides services to special needs children, and operates seven schools serving emotionally challenged and learning disabled children throughout the state.
The second, fourth and sixth paragraphs of this press release contain forward-looking statements that relate to future events and future financial performance of Centene. Subsequent events and developments may cause the company's estimates to change. The company disclaims any obligation to update this forward-looking financial information in the future. Readers are cautioned that matters subject to forward-looking statements involve known and unknown risks and uncertainties, including economic, regulatory, competitive and other factors that may cause Centene's or its 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. Actual results may differ from projections or estimates due to a variety of important factors, including Centene's ability to successfully integrate and manage the proposed acquisition of GPA, its ability to accurately predict and effectively manage health costs and other operating expenses, competition, changes in health care practices, changes in federal or state laws or regulations, inflation, provider contract changes, new technologies, reduction in provider payments by governmental or other payors, major epidemics, disasters and numerous other factors affecting the delivery and cost of healthcare. The expiration, cancellation or suspension of Centene's Medicaid managed care contracts by state governments would also negatively affect Centene.
CONTACT: Centene Corporation Karey L. Witty, 314/725-4477 or Investor Relations: In-Site Communications Lisa M. Wilson, 212/759-3929 URL: http://www.businesswire.com Today's News On The Net - Business Wire's full file on the Internet with Hyperlinks to your home page.
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Released March 3, 2003