First American Group Continues Expansion Strategy - Announces Agreement to Acquire Principal Health Care of Illinois, Inc.

MATTESON, Ill.--(BUSINESS WIRE)--Oct. 5, 1998--First American Group of Companies, Inc. (FAGOC) of Matteson, Illinois announced today that it has signed a definitive agreement to acquire Principal Health Care of Illinois, Inc. The move follows FAGOC's announcement last week that it was acquiring Maxicare Health Plans of the Midwest. Both acquisitions are subject to state and federal regulatory approval.

First American Group is the holding company for a number of managed care related ventures including American Health Care Providers, Inc. (AHCP) and DBA American HMO, one of the longest serving health maintenance organizations in the State of Illinois. AHCP has provided quality health care for almost two decades and today serves more than 150,000 subscribers in Illinois, Indiana and Arkansas. Upon the close of the Maxicare and Principal transactions, First American Group will serve more than 140,000 subscribers in the State of Illinois alone, according to Dan Splain, Executive Senior Vice President of FAGOC.

"The addition of Principal, along with our recent agreement to acquire Maxicare Health Plans of the Midwest, to the First American family will increase our critical mass while creating economies of scale that allow us to be a more effective provider of managed care services," said Asif A. Sayeed, Founder, Chairman, and CEO of the First American Group. "As the only locally owned managed care operation in the Chicago market, we believe that our regional strategy is sound and that ultimately the beneficiary of this consolidation will be our clients."

The Principal acquisition also places First American in the Medicare HMO field, a position welcomed by American's Dan Splain.

"We believe that a locally owned and managed health plan can do a superior job in understanding and meeting the unique health care needs of the mature market," said Splain. "Our commitment to our Medicare members is to collaborate with providers to maintain and implement programs that will meet their health care needs and enhance their life experience."

"American Health Care is absolutely committed to, and actively involved in, building a durable bridge between providers and ourselves to benefit our subscribers," said Asif Sayeed. "Too many health plans in Chicago, and elsewhere around the country, have failed to create a spirit of teamwork and partnership with the provider community to strengthen the quality of health care services that subscribers have every right to expect."

"We remain committed to creating a model for excellence in managed care," Sayeed added. "We never lose sight of the fact that our business primarily deals with human life and health issues."

Principal Health Care of Illinois, Inc. is a subsidiary of Bethesda, Maryland based Coventry Health Care, Inc. (Nasdaq:CVTY) and currently has approximately 57,000 members in Illinois and northwest Indiana.

FAGOC's other subsidiaries include American United Life and Health Insurance Company, International Health Management Systems, Inc., American Family Health Services, and Vital Home Health. FAGOC has 300 employees in offices in Chicago, Springfield, and Matteson, Illinois and Little Rock, Arkansas.