Centene Corp (NYSE: CNC) rose after the company reported the acquisition of substantially all assets of Fidelis Care for $3.75 billion.
The St. Louis-based company says the addition of Fidelis Care will expand Centene's national leadership in government sponsored healthcare with a leadership position in New York, the country's second largest managed care state by membership. With the addition of New York, Centene will have a leadership position in the country's four largest managed care states by membership – California, Florida, New York and Texas.
Fidelis Care is a not-for-profit corporation that is a diversified leader in government programs, serving over 1.6 million members as of the end of June, with total revenue of $4.8 billion for the six months ended June 30.
CEO Michael F. Neidorff remarked "Centene's and Fidelis Care's missions are fully aligned in terms of promoting health through high quality, accessible care and services for all and advocating for health policy that accords true dignity and respect for all people, especially the underserved.
“Through this transaction, we can further enhance the well-being of Fidelis Care's members and continue to build linkages and systems for the coordination of care and services among healthcare, behavioral and social services while doing so at an appropriate level of cost.”
With the buy, Centene expects to generate 2018 pro-forma total revenues of over $60 billion assuming a closing date of New Year’s Day 2018.
Shares in Centene climbed $5.68, or 6.2%, on the news to $96.56 Wednesday morning.
