Centene Corporation (NYSE: CNC) ("Centene") announced today that it has entered into a transaction whereby Community Health Solutions of America, Inc. ("CHS") will assign its contract with the Louisiana Department of Health and Hospitals ("DHH") under the Bayou Health Shared Savings Program to Centene's wholly owned subsidiary, Louisiana Healthcare Connections, Inc. ("LHCC"). The transaction is subject to regulatory approval, and LHCC will work with the DHH and CHS to obtain the required approvals and satisfy other conditions to facilitate a smooth transition for the more than 200,000 TANF, CHIP and ABD members currently enrolled in the CHS plan. Separately, Centene and CHS have entered into a business development partnership to pursue other managed care opportunities for Medicaid programs in new markets.
"Louisiana Healthcare Connections is pleased about this opportunity to continue our mission to provide high quality health outcomes to more people in Louisiana at lower costs to the state," said Jamie Schlottman, Plan President and CEO of Louisiana Healthcare Connections. Jesse N. Hunter, Executive Vice President and Chief Business Development Officer for Centene, said "This transaction will strengthen Louisiana Healthcare Connections' presence in Louisiana. We are excited to partner with CHS on shared savings opportunities as a way to extend our business development pipeline to new markets."
The purchase price will be between approximately $110 million and $140 million and is contingent upon regulatory approval. Initial consideration of $70 million consists of a cash payment of $14 million made at signing and $56 million to be paid in stock at closing, which is expected to be on June 30, 2014. The remaining purchase price will be paid in cash in multiple steps and will be finalized based on membership retained by LHCC in Q1 2015.
Further information will be provided at Centene's Investor Day on June 13th in New York City.
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