PHYSICIAN CORPORATION OF AMERICA AGREES TO ACQUIRE 60,000 MEMBER FAMILY HEALTH SYSTEMS, INC.
MIAMI, Aug. 9 /PRNewswire/ -- Physician Corporation of America (NASDAQ: PCAM) has signed a letter of intent to acquire Family Health Systems, Inc. (FHS), a Florida-based HMO with approximately 60,000 members, including 38,000 commercial, 21,000 Medicaid and 1,000 Medicare members. E. Stanley Kardatzke, M.D., PCA's chairman and chief executive officer, said the $45 million acquisition should close in mid-October, 1993, and is subject to the execution of a definitive purchase agreement and certain approvals including state and federal regulatory approvals. The acquisition will boost PCA's Florida membership by 26 percent to approximately 290,000, making it the second largest HMO in the state of Florida, and will increase PCA's total membership by 16 percent to approximately 430,000. In conjunction with the acquisition, Dr. Neil A. Natkow, president, chief executive officer and co-founder of FHS, will join the PCA senior management team as president of PCA's Florida operation. Dr. Kardatzke said, "Dr. Natkow has built a respected HMO with a reputation for delivering high quality, cost conscious health care. Under Dr. Natkow's leadership. FHS has developed a significant Florida presence and his addition to our senior management team will strengthen our company." Dr. Natkow said, "I am pleased that our members will continue to benefit from the philosophy that both companies share, which put quality health care delivery first." He added that there will be no disruption in coverage or the provision of services to FHS members during or after the transition period. Further, payments to physicians and other providers will continue on a normal basis. All FHS members and providers should experience a smooth and efficient transition, Dr. Natkow stressed. Strategically, Dr. Kardatzke noted that the acquisition will accomplish three major goals: 1) expand PCA's presence into all major population centers in Florida, 2) provide for the immediate entry into new markets including Tallahassee and Pensacola, 3) position the company for anticipated health care reform by making PCA the second largest HMO in the state of Florida, based upon total membership. PCA's Chief Financial Officer Clifford W. Donnelly said the purchase price will be financed with a combination of existing cash and usage of the company's line of credit. PCA's Florida operations and FHS will be consolidated in 1993 which is expected to result in a significant increased in 1994 earnings. The acquisition will add approximately $90 million in annual premium revenues. Physician Corporation of America provides comprehensive health care services through its health maintenance organizations located in Florida and Texas. The company's HMOs cover commercial groups and individuals as well as beneficiaries of government programs. -0- 8/9/93 /CONTACT: Kamal Hamid, financial analyst of Physician Corporation of America, 305-267-6223/ (PCAM)
CO: Physician Corporation of America; Family Health Systems, Inc. ST: Florida IN: HEA INS SU: TNM
RC-XX -- FL001 -- 0596 08/09/93 08:03 EDT
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|Date:||Aug 9, 1993|
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