Fortune 500 company Centene Corporation (NYSE: CNC) announced today it has signed into a definitive agreement to acquire majority interest in U.S. Medical Management, LLC (USMM) for approximately $200 million.
Centene will acquire an approximate 68% interest in USMM, a home health company based in Troy, Michigan—an investment that Centene says will underscore its commitment to providing integrated care for the aged, blind and disabled, long-term care, dual-eligible and Medicare populations.
“The partnership with USMM is the next step in Centene’s strategy to provide a continuum of high quality services that allow us to effectively manage the complex needs of our growing high acuity populations,” commented Michael Niedorff, chairman and CEO of Centene. “We believe that there is significant opportunity to enhance access to health services and quality of life for complex populations by removing barriers to receiving care in the home.”
In conjunction with the investment, Centene is also announcing the formation of a new healthcare enterprise holding company that will connect the company and other health solution providers, while also preserving the “entrepreneurial spirit and innovation” that fosters improved health outcomes, through more efficient care models, the company stated in a release.
USMM, either directly or through its managed affiliates, conducts over 400,000 physician house calls annually and over 2,500 face-to-face patient interactions on a daily basis. The company currently operates 39 local offices across 11 states, including seven states in which Centene currently operates.
“USMM has been committed to providing high quality, compassionate and cost-effective in-home care to our patients for over 20 years and will continue to do so,” said USMM CEO Mark Mitchell in a statement. “We share Centene’s core belief that integrated care models lead to improved quality, enhanced medical outcomes and cost efficient care. We are confident that we will drive meaningful results and enhance care delivery for Centene’s growing high acuity population.”
Mitchell will continue to lead the company and retain his existing management team after the deal’s expected closing in the first quarter of 2014.
The deal is expected to be accretive to Centene’s earnings per share by $0.02 to $0.05 in 2014, excluding transaction costs. As a result, Centene expects the transaction to be accretive to earnings per share by $0.20 to $0.25 in 2015.
Written by Jason Oliva
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