IBJNews

WellPoint paying almost $800M for CareMore

Back to TopCommentsE-mailPrintBookmark and Share

Indianapolis-based WellPoint Inc., the biggest U.S. insurer by enrollment, agreed to acquire CareMore Health Group to expand Medicare coverage in California, Arizona and Nevada.

CareMore, owned by CCMP Capital Advisors LLC, serves 54,000 members and operates 26 primary-care clinics, WellPoint said Wednesday in a statement.

The insurer paid almost $800 million, according to people familiar with the deal who declined to be identified because they weren’t authorized to release the information. WellPoint declined to comment on the sale price or provide other financial details, said Kristin Binns, a spokeswoman.

Medicare, the U.S. government health program for the elderly and disabled, is significant to WellPoint’s growth strategy, CEO Angela Braly said in the statement. The acquisition won’t help earnings until 2013, the insurer said.

WellPoint is the latest managed-care company to expand into providing medical care directly, said Thomas A. Carroll, an analyst at Stifel Nicolaus & Co. in Baltimore.

“Medicare Advantage is a nice long-term growth story from here on out,” Carroll said. “We’ve got a 15-year hill ahead of us where more and more people are going to become eligible.”

WellPoint stock was down fell 17 cents, to $75.76 per share, in afternoon trading.

Insurers offering plans and clinics “may end up being the new joint model moving forward,” said Jason Gurda, an analyst at Leerink Swann & Co. in New York. Humana Inc. acquired Concentra Inc., operator of more than 300 medical centers in 40 states, in December 2010 for $790 million.

On first impression, WellPoint appears to have paid “a substantial premium for the asset,” Ana Gupte, an analyst at Sanford C. Bernstein & Co., wrote in an e-mail, saying she needed time to evaluate what possible contributions other than membership CareMore represents for WellPoint. CareMore is based in Cerritos, Calif.

WellPoint is the third-largest provider of Medicare Advantage plans after UnitedHealth Group Inc. in Minnetonka, Minn, and Louisville-based Humana, according to Bloomberg data. Medicare Advantage is the name for the commercial managed-care plans marketed to Medicare beneficiaries.

Morgan Stanley served as the investment bank for the deal, according to WellPoint.

 

ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
ADVERTISEMENT

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
 
Subscribe to IBJ
  1. Really, taking someone managing the regulation of Alcohol and making himthe President of an IVY Tech regional campus. Does he have an education background?

  2. Jan, great rant. Now how about you review the report and offer rebuttal of the memo. This might be more conducive to civil discourse than a wild rant with no supporting facts. Perhaps some links to support your assertions would be helpful

  3. I've lived in Indianapolis my whole and been to the track 3 times. Once for a Brickyard, once last year on a practice day for Indy 500, and once when I was a high school student to pick up trash for community service. In the past 11 years, I would say while the IMS is a great venue, there are some upgrades that would show that it's changing with the times, just like the city is. First, take out the bleachers and put in individual seats. Kentucky Motor Speedway has individual seats and they look cool. Fix up the restrooms. Add wi-fi. Like others have suggested, look at bringing in concerts leading up to events. Don't just stick with the country music genre. Pop music would work well too I believe. This will attract more young celebrities to the Indy 500 like the kind that go to the Kentucky Derby. Work with Indy Go to increase the frequency of the bus route to the track during high end events. That way people have other options than worrying about where to park and paying for parking. Then after all of this, look at getting night lights. I think the aforementioned strategies are more necessary than night racing at this point in time.

  4. Talking about congestion ANYWHERE in Indianapolis is absolutely laughable. Sure you may have to wait in 5 minutes of traffic to travel down BR avenue during *peak* times. But that is absolutely nothing compared to actual big cities. Indy is way too suburban to have actual congestion problems. So please, never bring up "congestion" as an excuse to avoid development in Indianapolis. If anything, we could use a little more.

  5. Oh wait. Never mind.

ADVERTISEMENT