COVENTRY CORPORATION ANNOUNCES ACQUISITION OF HEALTHCARE USA; ENTERS MEDICAID MARKET AND CONTINUES SOUTHEAST EXPANSION.NASHVILLE, Tenn.--(BUSINESS WIRE)--Feb. 6, 1995--Coventry Corporation (Nasdaq/NM:CVTY) today announced that it has entered into a definitive agreement to acquire HealthCare USA, a Jacksonville, Florida-based, managed care company, in a tax-free stock-for-stock transaction. HealthCare USA operates a 28,000-member Medicaid Medicaid, national health insurance program in the United States for low-income persons; established in 1965 with passage of the Social Security Amendments and now run by the Centers for Medicare and Medicaid Services. HMO HMO health maintenance organization. HMO n. A corporation that is financed by insurance premiums and has member physicians and professional staff who provide curative and preventive medicine within certain financial, in Jacksonville, has developed Medicaid networks in St. Louis, Missouri Missouri, state, United States Missouri (mĭz  r`ē, –ə), one of the midwestern states of the United States. , and Birmingham, Alabama Birmingham (pronounced [ˈbɝmɪŋˌhæm]) is the largest city in the U.S. state of Alabama and is the county seat of Jefferson County. , and has received its Florida commercial HMO license. Completion of the transaction, which will be accounted for as a pooling-of-interests, is expected within two months and is conditioned upon receipt of regulatory approvals. Both Boards of Directors and the shareholders of HealthCare USA have approved the transaction. Consideration for the transaction will be Coventry common stock valued at approximately $62 million. The transaction is expected to be modestly accretive to Coventry's earnings per share in 1995. In Coventry's and HealthCare USA's existing service areas, there are approximately 750,000 Medicaid-eligible individuals. Furthermore, in the HealthCare USA expansion areas of Birmingham, Alabama, and Orlando, Florida The city of Orlando is a major city in central Florida and is the county seat of Orange County, Florida. According to the 2000 census, the city population was 185,951. A 2006 U.S. , there are an additional 450,000 Medicaid-eligible individuals. Philip Hertik, President and Chief Executive Officer of Coventry, said, "We are extremely pleased that with this one transaction, we accomplish the dual objectives of entering the Medicaid market and continuing our geographic expansion into the Southeast. HealthCare USA brings an experienced and talented management team to lead the immediate development of Medicaid programs in our existing Coventry markets as well as new markets. We will use the Coventry development staff to accelerate the introduction of our commercial HMO products in North Florida. "The combination of HealthCare USA's network with our existing commercial delivery system in St. Louis will create excellent positioning for entry into the Missouri Medicaid managed care program, which we anticipate will require enrollment of Medicaid recipients in managed care programs on a state-wide basis beginning August of this year. Coventry's operations in Pittsburgh and Central Pennsylvania Pennsylvania (pĕnsəlvā`nyə), one of the Middle Atlantic states of the United States. It is bordered by New Jersey, across the Delaware River (E), Delaware (SE), Maryland (S), West Virginia (SW), Ohio (W), and Lake Erie and New York , and Richmond, Virginia Richmond IPA: [ɹɯʒmɐnɖ] is the capital of the Commonwealth of Virginia, in the United States. , will benefit from entry into the existing voluntary Medicaid programs. Further, HealthCare USA's newly granted commercial HMO license will permit us to bring Coventry's considerable commercial expertise to the Jacksonville market, a market we consider underpenetrated in the commercial sector." Christopher T. Fey, founder, President and Chief Executive Officer of HealthCare USA, said, "We are pleased to have entered into this agreement because it allows us to share resources and expertise with a proven company that has a philosophy very much like our own. Every decision we make is based on a commitment to quality and accountability, and we sincerely believe this creates the foundation of our long-term success. This alliance creates a number of synergies that complement both companies' long-range goals." Coventry Corporation, headquartered in Nashville, Tennessee “Nashville” redirects here. For other uses, see Nashville (disambiguation). Nashville is the capital and the second most populous city of the U.S. state of Tennessee, after Memphis. , is a managed health care company that provides a wide range of health benefits to a broad cross section of employer groups employer group Association of employers Managed care An entity with a current group benefits agreement in effect with a health plan to provide covered health care services to its employee-subscribers and eligible dependents. in Pennsylvania, Missouri, Illinois and Virginia. Operating from regional headquarters in Pittsburgh and Harrisburg, Pennsylvania This article is about the capital city of the Commonwealth of Pennsylvania. For other places named Harrisburg, see Harrisburg (disambiguation). Harrisburg is the capital of the Commonwealth of Pennsylvania, a state of the United States of America. , St. Louis, Missouri, and Richmond, Virginia, Coventry serves a membership of 548,000. CONTACT: Coventry Corp., Nashville Richard H. Jones, 615/391-2440 |
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