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HEALTHSOURCE SIGNS LETTER OF INTENT TO PURCHASE INDIANA HMO

 HEALTHSOURCE SIGNS LETTER OF INTENT TO PURCHASE INDIANA HMO
 CONCORD, N.H., Dec. 17 /PRNewswire/ -- Healthsource, Inc. (NASDAQ: HLTH), a leading operator of HMOs and managed health care services, announced today that it has signed a letter of intent to acquire the preferred provider group health insurance business and the HMO subsidiary of the United Farm Bureau Family Life Insurance Company (UFB-FLIC). Under the terms of the letter of intent, Healthsource will pay UFB-FLIC $7.5 million cash as total consideration for the purchase. The purchase will also include a small group life business operated by UFB-FLIC.
 The HMO subsidiary of UFB-FLIC has approximately 20,000 members and $25 million in estimated 1991 annual revenues. The group health insurance business consists of about 20,000 insured members with estimated 1991 annual revenues of $29 million. Both the HMO and group insurance businesses provide services statewide in Indiana.
 The completion of the sale is contingent upon the negotiation and execution of a definitive agreement, the satisfactory completion of due diligence review, the obtaining of an insurance license in the state of Indiana, the approval by the Indiana State regulatory authorities and certain other conditions.
 Norman C. Payson, M.D., chief executive officer of Healthsource, stated, "We are very pleased to have signed this letter of intent. We believe that the existing HMO and preferred provider group insurance businesses are well positioned, with excellent management in place. This potential acquisition is consistent with Healthsource's focus on building managed health care businesses in secondary markets."
 Healthsource, Inc. sponsors or manages HMOs in New Hampshire, Maine, North Carolina, South Carolina and New York, and owns EBPA, the largest third-party claims administrator in New England. Healthsource also provides utilization review services and preferred provider of networks primarily to self-insured employer plans and Blue Cross and Blue Shield of Vermont. On Dec. 3, 1991, Healthsource completed the purchase of Tennessee First Health Plan, Inc. located in Knoxville, Tenn.
 -0- 12/17/91
 /CONTACT: Thomas Congoran, chief financial officer, or Tracey Turner, shareholder relations, of Healthsource, 603-225-5077; or Kerry Thalheim, 212-661-8030, or Kathy Waller, 312-266-7800, of The Financial Relations Board, Inc., for Healthsource/
 (HLTH) CO: Healthsource, Inc.; United Farm Bureau Family Life Insurance Co. ST: New Hampshire, Indiana IN: HEA SU: TNM


SH -- NE005 -- 2996 12/17/91 13:45 EST
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Publication:PR Newswire
Date:Dec 17, 1991
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