HEALTH RISK MANAGEMENT, INC., AND PENSION AND GROUP SERVICES, INC. ANNOUNCE AGREEMENT IN PRINCIPLE ON ACQUISITION
HEALTH RISK MANAGEMENT, INC., AND PENSION AND GROUP SERVICES, INC.
ANNOUNCE AGREEMENT IN PRINCIPLE ON ACQUISITION
MINNEAPOLIS, Nov. 18 /PRNewswire/ -- Health Risk Management, Inc. (HRM) (NASDAQ: HRMI) and Pension and Group Services, Inc. (P&G) announced today that they have reached an agreement in principle for the acquisition for cash of P&G's third party administrator (TPA) and related services business by HRM. Under the preliminary agreement, the total consideration from HRM will be approximately 7,000,000, which includes the assumption of certain liabilities and payments for consulting and noncompete arrangements. HRM indicated that it did not expect the acquisition to have any dilutive effect on its earnings per share for the current fiscal year which ends June 30, 1992.
The proposed acquisition is subject to the execution of a definitive agreement, approval by HRM's board of directors, due diligence investigation and the satisfaction of other customary conditions. The parties anticipate having the acquisition completed in early 1992.
Gary T. McIlroy, M.D., HRM chairman and chief executive officer, stated, "We are delighted with the opportunity to combine P&G's business with the HRM organization. P&G's management, capabilities and achievements are impressive, and we are confident that the combination of our businesses can significantly enhance our services. The acquisition provides HRM increased market share and a strong regional presence."
According to John M. Connors, president and founder of P&G, "HRM is a well-respected managed care company within our industry. The combined resources of both organizations will present the marketplace with established services to meet the full range of client health care management needs."
The P&G business to be acquired, located in Kalamazoo, Mich., provides claims administration services currently to approximately 45,000 employees under medical benefit plans. The revenues of the business to be acquired were approximately $8,000,000 for the year ended Dec. 31, 1990, and approximately $7,300,000 for the 10 months ended Oct. 31, 1991. Bret Connors, senior vice president of P&G, will continue his role with the acquired P&G business after the sale. John Connors of P&G will also continue to be involved with the acquired business.
HRM also announced new contracts and commitments with estimated annual revenues for three new and several existing clients of $1.5 million. This brings total new annual revenues announced to date to $5.5 million.
Headquartered in Minneapolis, Health Risk Management, Inc., provides a broad range of integrated managed health care services for benefit plans of employers, unions, governmental entities and insurance company clients.
/CONTACT: Nancy Hurd of Health Risk Management, 612-829-3749/
(HRMI) CO: Health Risk Management, Inc. ST: Minnesota IN: INS SU: TNM JS -- MN007 -- 1403 11/18/91 11:42 EST